METHANEX CORPORATION 2012-03-20 T-11:25

A Responsible Care” Company

METHANEX CORPORATION

ANNUAL INFORMATION FORM

www.methanex.com

March 15, 2012

TABLE OF CONTENTS

REFERENCE INFORMATION
CAUTION REGARDING FORWARD-LOOKING STATEM
THE COMPANY incocicicinconiciciononos
BUSINESS OF THE COMPANY
Overview of the Business
DEVELOPMENT OF THE BUSINESS AND CORPORATE STRATEGY
Our Strategy
METHANOL INDUSTRY INFORMATION
General mo…
Demand Factors
Supply Factors
Methanol Prices
PRODUCTION
Production Process ..
Operating Data and Other Information..
MARKETING cooooiciooicicicioninicioconcncnnos
DISTRIBUTION AND LOGISTICS
NATURAL GAS SUPPLY ..
General
Chile ….
Trinidad
New Zealand..
Egypt
Canada.
FOREIGN OPERATIONS AND GOVERNMENT REGULATION
General
Chile ….
Trinidad
New Zealand..
EByPt .ccococo..
RESPONSIBLE CARE
ENVIRONMENTAL MATTERS
Management of Greenhouse Gas Emissions
INSURANCE…
COMPETITION
EMPLOYEES ..
RISK FACTORS
DIVIDENDS…..
CAPITAL STRUCTURE.
RATINGS cnoccicicioioninos
MARKET FOR SECURITIE
DIRECTORS AND EXECUTIVE OFFICERS .
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS.
EXPERTS…
LEGAL PROCEEDIN
AUDIT COMMITTEE INFORMATION
The Audit Committee Charter
Composition of the Audit Committee
Relevant Education and Experience …
Pre-Approval Policies and Procedures
Audit and Non-Audit Fees Billed by the Independent Auditors
TRANSFER AGENT AND REGISTRAR
CONTROLS AND PROCEDURES
CODE OF ETHICS
ADDITIONAL INFORMATION
APPENDIX “A”

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REFERENCE INFORMATION

In this Annual Information Form (“AIF”), a reference to the “Company” refers to Methanex Corporation and a reference to
“Methanex,” “we,” “us,” “our” and similar words refers to the Company and its subsidiaries or any one of them as the context requires,
as well as their respective interests in joint ventures and partnerships.

We use the United States dollar as our reporting currency. Accordingly, unless otherwise indicated, all dollar amounts in this AIF
are stated in United States dollars.

In this AIF, unless the context otherwise indicates, all references to “methanol” are to chemical-grade methanol. Methanol”s
chemical formula is CH¿OH and it is also known as methyl alcohol.

In this AIF, we incorporate by reference our 2011 Management’s Discussion and Analysis (“2011 MDKA”), which
contains information required to be included in this AIF. The 2011 MD¿A is publicly accessible and is filed on the Canadian
Securities Administrators* SEDAR website at www.sedar.com and on the United States Securities and Exchange
Commission’s EDGAR website at www.sec.gov.

The approximate conversion of measurement used in this AIF is as follows:
1 tonne of methanol = 332.6 US gallons of methanol

Some of the historical price data and supply and demand statistics for methanol and certain other industry data contained in this
AIF are derived by the Company from industry consultants or from recognized industry reports regularly published by independent
consulting and data compilation organizations in the methanol industry, including Chemical Market Associates Inc., Jim Jordan $
Associates, Tecnon OrbiChem Ltd., DeWitt $ Company Incorporated and Consensus Economics Inc. Industry consultants and
industry publications generally state that the information provided has been obtained from sources believed to be reliable. We have not
independently verified any of the data from third-party sources nor have we ascertained the underlying economic assumptions relied
upon in these reports.

Responsible Care” is a registered trademark of the Chemistry Industry Association of Canada and is used under license by us.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements with respect to us and our industry. These statements relate to future events
or our future performance. All statements other than statements of historical fact are forward-looking statements. Statements that
include the words “believes,” “expects,” “may,” “will,” “should,” “potential”, “estimates,” “anticipates,” “aim”, “goal” or other
comparable terminology and similar statements of a future or forward-looking nature identify forward-looking statements.

” e ”

More particularly and without limitation, any statements regarding the following are forward-looking statements:

expected demand for methanol and its derivatives,

expected new methanol supply and timing for
start-up of the same,

expected shutdowns (either temporary or permanent)
or restarts of existing methanol supply (including our
own facilities), including, without limitation, timing
and length of planned maintenance outages,

expected methanol and energy prices,

expected levels of methanol purchases from traders
or other third parties,

expected levels, timing and availability of
economically priced natural gas supply to each of our
plants, including, without limitation, levels of natural
gas supply from investments in natural gas
exploration and development in Chile and New
Zealand,

commitments, capital or otherwise, of third parties to
future natural gas exploration and development in the
vicinity of our plants,

expected capital expenditures, including, without
limitation, those to support natural gas exploration
and development for our plants and the restart of our
idled methanol facilities,

anticipated production rates of our plants, including,
without limitation, our Chilean facilities and the
planned restart of the Motunui 1 facility in New
Zealand,

expected operating costs, including natural gas
feedstock costs and logistics costs,

ability to reduce CO, emissions and other greenhouse
gases from our operations,

expected tax rates or resolutions to tax disputes,

expected cash flows, earnings capability and share
price,

ability to meet covenants or obtain waivers associated
with our long-term debt obligations, including,
without limitation, the Egypt limited recourse debt
facilities which have conditions associated with
finalization of certain land title registration and
related mortgages which require actions by Egyptian
governmental entities,

availability of committed credit facilities and other
financing,

shareholder distribution strategy and anticipated
distributions to shareholders,

commercial viability of, or ability to execute, future
projects, plant restarts, capacity expansions, plant
relocations, or other business initiatives or
opportunities, including the planned relocation of one
of our idle Chile methanol plants to the United States
Gulf Coast,

financial strength and ability to meet future financial
commitments,

expected global or regional economic activity
(including industrial production levels),

expected outcomes of litigation or other disputes,
claims and assessments,

expected impact of regulatory actions, including
assessments of carcinogenicity of methanol,
formaldehyde and MTBE, the imposition of
formaldehyde emission limits and legislation related
to CO, emissions,

expected actions of governments, government
agencies, gas suppliers, courts, tribunals or other
third parties, and

expected impact on our results of operations in Egypt
and our financial condition as a consequence of
actions taken by the Government of Egypt and its
agencies.

We believe that we have a reasonable basis for making such forward-looking statements. The forward-looking statements in this
document are based on our experience, our perception of trends, current conditions and expected future developments as well as other
factors. Certain material factors or assumptions were applied in drawing the conclusions or making the forecasts or projections that are
included in these forward-looking statements, including, without limitation, future expectations and assumptions concerning the
following:

supply of, demand for, and price of, methanol, methanol
derivatives, natural gas, oil and oil derivatives,

success of natural gas exploration in Chile and New
Zealand and our ability to procure economically priced
natural gas in Chile, New Zealand and Canada,

production rates of our facilities,

receipt or issuance of third party consents or approvals,
including, without limitation, governmental registrations
of land title and related mortgages in Egypt, governmental
approvals related to natural gas exploration rights, rights
to purchase natural gas or the establishment of new fuel
standards,

operating costs including natural gas feedstock and
logistics costs, capital costs, tax rates, cash flows, foreign
exchange rates and interest rates,

availability of committed credit facilities and other
financing,

timing of completion and cost of our Motunui 1 restart
project in New Zealand,

global and regional economic activity (including industrial
production levels),

absence of a material negative impact from major natural
disasters,

absence of a material negative impact from changes in
laws or regulations,

accuracy and sustainability of opinions provided by our
legal, accounting and other professional advisors,

absence of material negative impact from political
instability in the countries in which we operate, and

enforcement of contractual arrangements and ability to
perform contractual obligations by customers, suppliers
and other third parties.

However, forward-looking statements, by their nature, involve risks and uncertainties that could cause actual results to differ
materially from those contemplated by the forward-looking statements. The risks and uncertainties primarily include those attendant
with producing and marketing methanol and successfully carrying out major capital expenditure projects in various jurisdictions,
including, without limitation.

conditions in the methanol and other industries,
including fluctuations in supply, demand and price
for methanol and its derivatives, including demand
for methanol for energy uses,

the price of natural gas, oil and oil derivatives,

the success of natural gas exploration and
development activities in southern Chile and New
Zealand and our ability to obtain any additional gas
in Chile, New Zealand and Canada on
commercially acceptable terms,

the ability to successfully carry out corporate
initiatives and strategies,

actions of competitors, suppliers, and financial
institutions,

actions of governments and governmental authorities
including, without limitation, implementation of policies
or other measures that could impact the supply or
demand for methanol or its derivatives,

changes in laws or regulations,

import or export restrictions, anti-dumping measures,
increases in duties, taxes and government royalties, and
other actions by governments that may adversely affect
our operations or existing contractual arrangments,

world-wide economic conditions, and

other risks described in the 2011 Management’s
Discussion and Analysis.

Having in mind these and other factors, investors and other readers are cautioned not to place undue reliance on forward-looking
statements. They are not a substitute for the exercise of one’s own due diligence and judgment. The outcomes anticipated in
forward-looking statements may not occur and we do not undertake to update forward-looking statements except as required by
applicable securities laws.

THE COMPANY

Methanex Corporation was incorporated under the laws of Alberta on March 11, 1968 and was continued under the Canada
Business Corporations Act on March 5, 1992. Its registered and head office is located at 1800 Waterfront Centre, 200 Burrard Street,
Vancouver, British Columbia, V6C 3M1 (telephone: 604-661-2600).

The following chart includes the Company”s principal operating subsidiaries as of December 31, 2011 and, for each subsidiary, its
place of organization and the Company”s percentage of voting interests beneficially owned or over which control or direction is

exercised. The chart also shows our principal production facilities and their locations.

lle Z Methanex e
33 Chile S.A. 0
2 E lo Chil Plants!
AÑ ? (Chile) (Chile)
Waterfront Shipping
Company Limited
100% | (Cayman Islands) –
s Medicine Hat
S Plant
2 Alberta
E Methanex Methanol ( )
3 Company, LLC
3 100% (Delaware) (1) Our four plants in Chile represent 3.8
= million tones per year of annual production
3 “a capacity; since 2007 we have operated the
5 Methanex Trinidad site significantly below capacity due
E (Titan) Unlimited DST primarily to curtailments of natural gas
100% (Trinidad) e supply from Argentina.
S Ú Grinidad)
E
2 (2) Our 470,000 tonne per year plant in
Í (Atlas Medicine Hat was restarted in April 2011.
Atlas Methanol Methanol
Company Unlimited Td . .
3.1%] Y Plant (3) The Titan plant represents 900,000 tonnes of
: (Trinidad) (Trinidad) annual production capacit
Methanex Y TA ! xx
. – (4) Our equity interest in the Atlas plant
Corporation – represents 1.2 million tonnes of annual
(Canada) Á production capacity.
Methanex Asia
Pacific Limited (5) We restarted one idled 850,000 tonne per
100% (Hong Kong) year Motunui plant in 2008 and we have
committed to restart the other 850,000 tonne
per year Motunui plant in mid-2012. Due to
É Methanex New Motunui current distillation capacity constraints at the
3 a Methanol Motunui site, the combined operating
3 Zealand Limited 5 pS : .
a 100% (New Zealand) Plants capacity of both plants is approximately 1.5
£ (New Zealand) million tonnes per year.
2 Methanex Motunui
100% Limited (6) Our 530,000 tonne per year Waitara Valley
(New Zealand) aitara Valle plant was idled in October 2008 after the
CI restart of one of our 850,000 tonne per year
Plantó Motunui plants.
| (New Zealand) o Ñ
AI (7) Our equity interest in the EMethanex plant
Jl represents 760,000 tones of annual
>, production capacity and commenced
Á commercial operations in March 2011.
2 Methanex Europe
2 SA/NV
E 100% (Belgium)
Ss Egyptian Methanex EMethanex
5 E Methanol Company Methanol
22 60m | S-A-E.(EMethanex) Plant”
SE : (EgypD) (Esyp0)
SS
AÑ

BUSINESS OF THE COMPANY

Overview of the Business

Methanol is a clear liquid commodity chemical that is predominantly produced from natural gas and also, particularly in China,
from coal. Approximately two-thirds of all methanol demand is used to produce traditional chemical derivatives including
formaldehyde, acetic acid and a variety of other chemicals that form the basis of a large number of other chemical derivatives for
which demand is influenced by levels of global economic activity. The remaining one-third of methanol demand comes from
energy-related applications. There has been strong demand growth for direct methanol blending into gasoline, as a feedstock in the
production of dimethyl ether (DMBE), which can be blended with liquefied petroleum gas for use in household cooking and heating,
and in the production of biodiesel. Methanol is also used to produce methy]l tertiary-butyl ether (MTBE), a gasoline component, and
an emerging application is for methanol demand into olefins.

We are the world”s largest supplier of methanol to major international markets in Asia Pacific, North America, Europe and Latin
America. Our total annual production capacity, including Methanex equity interests in jointly owned plants, is currently 9.3 million
tonnes and is located in Chile, Trinidad, Egypt, New Zealand and Canada (refer to the Production section on page 14 for more
information). We have marketing rights for 100% of the production from the jointly owned plants in Trinidad and Egypt and this
provides us with an additional 1.2 million tonnes per year of methanol offtake supply when those plants are operating at full capacity.
In addition to the methanol produced at our sites, we purchase methanol produced by others under methanol offtake contracts and on
the spot market. This gives us flexibility in managing our supply chain while continuing to meet customer needs and support our
marketing efforts.

Our operations consist of the production and sale of methanol, which constitutes a single operation segment. Revenue, sales
volumes and production volumes for each of the last two years can be found under Financial Highlights in our 2011 MD£A.

DEVELOPMENT OF THE BUSINESS AND CORPORATE STRATEGY

Our Strategy

Our primary objective is to create value by maintaining and enhancing our leadership in the global production, marketing and
delivery of methanol to customers. Our simple, clearly defined strategy – global leadership, low cost and operational excellence – has
helped us achieve this objective.

Global Leadership

Global leadership is a key element of our strategy with a focus on maintaining and enhancing our position as the major supplier to
the global methanol industry, enhancing our ability to cost-effectively deliver methanol supply to customers and supporting both
traditional and energy-related global methanol demand growth.

We are the leading supplier of methanol to the major international markets of North America, Asia Pacific, Europe and Latin
America. We grew sales volumes by 8% in 2011 to 7.51 million tonnes, representing approximately 15% of global demand. Our
leadership position has enabled us to play an important role in the industry, which includes publishing Methanex reference prices that
are generally used in each major market as the basis of pricing for most customer contracts.

The geographically diverse locations of our production sites allow us to deliver methanol cost-effectively to customers in all
major global markets, while investments in global distribution and supply infrastructure, which include a dedicated fleet of
ocean-going vessels and terminal capacity within all major international markets, enable us to enhance value to customers by
providing reliable and secure supply.

A key component of our global leadership strategy is a focus on strengthening our asset position and increasing production
capability. We increased production in 2011 with the start-up of the new 1.26 million tonne per year methanol plant in Egypt and the
restart of our 0.47 million tonne per year Medicine Hat, Alberta plant. We recently announced our commitment to restart a second
facility in New Zealand in mid-2012 and this will provide an additional 0.65 million tonnes of methanol capacity. Our New Zealand
facilities are ideally situated to supply the growing Asia Pacific market.

Our methanol facilities in Chile represent 3.8 million tonnes of annual production capacity and since 2007 we have operated the
site significantly below capacity. This is primarily due to curtailments of natural gas supply from Argentina (refer to the Natural Gas
Supply – Chile section on page 16 for further information). Our primary goal is to progressively increase production at the Chile site
with natural gas from suppliers in Chile by supporting the acceleration of natural gas development in southern Chile. Significant
investments have been made in the last few years for natural gas exploration and development in southern Chile and gas deliveries
from these investments have allowed us to continue to operate one plant. However, the timelines for significant increases in gas
production are much longer than we had originally anticipated and existing gas fields are experiencing declines. As a result, the
short-term outlook for gas supply in Chile continues to be challenging and we are considering other projects to increase the utilization
of our Chile assets. We are planning to relocate one of the idle Chile methanol plants with a capacity of approximately 1.0 million
tonnes to Geismar, Louisiana, with a final investment decision expected in the third quarter of 2012. We are also continuing to
examine the viability of utilizing coal gasification as an alternative feedstock in Chile.

Another key component of our global leadership strategy is our ability to supplement methanol production with methanol
purchased from others to give us flexibility in our supply chain and continue to meet customer commitments. We purchase through a
combination of methanol offtake contracts and spot purchases. We manage the cost of purchased methanol by taking advantage of our
global supply chain infrastructure, which allows us to purchase methanol in the most cost-effective region while still maintaining
overall security of supply. We grew sales and purchasing levels in 2011 in anticipation of increased production from the Egypt and
Medicine Hat facilities. We expect purchased methanol will represent a lower proportion of overall sales volumes in 2012 compared
to 2011 as a result of higher production from Egypt, Medicine Hat and New Zealand.

The Asia Pacific region continues to lead global methanol demand growth and we have invested in and developed our presence in
this important region. We have storage capacity in China and Korea that allows us to cost-effectively manage supply to customers and
we have offices in Hong Kong, Shanghai, Beijing, Seoul and Tokyo to enhance customer service and industry positioning in the
region. This enables us to participate in and improve our knowledge of the rapidly evolving and high growth methanol markets in
China and other Asian countries. Our expanding presence in Asia has also helped us identify several opportunities to support the
development of applications for methanol in the energy sector.

Low Cost

A low cost structure is an important element of competitive advantage in a commodity industry and is a key element of our
strategy. Our approach to major business decisions is guided by a drive to improve our cost structure, expand margins and create value
for shareholders. The most significant components of total costs are natural gas for feedstock and distribution costs associated with
delivering methanol to customers.

Our production facilities in Trinidad and Egypt represent 2.8 million tonnes per year of competitive cost production capacity.
These facilities are well located to supply markets in North America and Europe and are underpinned by take-or-pay natural gas
purchase agreements where the gas price varies with methanol prices. This pricing relationship enables these facilities to be
competitive throughout the methanol price cycle.

During 2011, we operated one Motunui facility in New Zealand and we recently announced our commitment to restart a second
Motunui facility in mid-2012, which will add up to 0.65 million tonnes of incremental capacity per annum. In support of the restart,
Methanex has entered into a ten-year natural gas purchase agreement that is expected to supply up to half of the 1.5 million tonnes of
annual capacity at the Motunui site under terms that include base and variable price components.

Our 0.47 million tonne facility in Medicine Hat, Alberta is ideally situated to supply customers in North America. We have a
program in place to purchase natural gas on the Alberta gas market and we believe that the long-term natural gas dynamics in North
America will support the long-term operation of this facility.

The cost to distribute methanol from production locations to customers is also a significant component of total operating costs.
These include costs for ocean shipping, in-market storage facilities and in-market distribution. We are focused on identifying
initiatives to reduce these costs, including optimizing the use of our shipping fleet and taking advantage of prevailing conditions in the
shipping market by varying the type and length of term of ocean vessel contracts. We are continuously investigating opportunities to
further improve the efficiency and cost-effectiveness of distributing methanol from our production facilities to customers. We also
look for opportunities to leverage our global asset position by entering into product exchanges with other methanol producers to
reduce distribution costs.

Operational Excellence

We maintain a focus on operational excellence in all aspects of our business. This includes excellence in the manufacturing and
supply chain processes, marketing and sales, human resources, corporate governance practices and financial management.

8

To differentiate ourselves from competitors, we strive to be the best operator in all aspects of our business and to be the preferred
supplier to customers. We believe that reliability of supply is critical to the success of our customers” businesses and our goal is to
deliver methanol reliably and cost-effectively. We have a commitment to Responsible Care (a risk-minimization approach developed
by the Chemistry Industry Association of Canada) and we use it as the umbrella under which we manage issues related to health,
safety, the environment, community involvement, social responsibility, security and emergency preparedness at each of our facilities
and locations. We believe a commitment to Responsible Care helps us reduce the likelihood of unplanned shutdowns and safety
incidents and achieve an excellent overall environmental and safety record.

Product stewardship is a vital component of a Responsible Care culture and guides our actions through the complete life cycle of
our product. We aim for the highest safety standards to minimize risk to employees, customers and suppliers as well as to the
environment and the communities in which we do business. We promote the proper use and safe handling of methanol at all times
through a variety of internal and external health, safety and environmental initiatives, and we work with industry colleagues to
improve safety standards and regulatory compliance. We readily share technical and safety expertise with key stakeholders, including
customers, end-users, suppliers, logistics providers and industry associations in the methanol and methanol applications marketplace
through active participation in local and international industry seminars and conferences, and online education initiatives.

As a natural extension of the Responsible Care ethic, we have a Social Responsibility policy that aligns corporate governance,
employee engagement and development, community involvement and social investment strategies with our core values and corporate
strategy.

Our strategy of operational excellence also includes the financial management of the Company. We operate in a highly
competitive commodity industry. Accordingly, we believe it is important to maintain financial flexibility and we have adopted a
prudent approach to financial management. At December 31, 2011, we had a strong balance sheet with a cash balance of $351 million
and a $200 million undrawn credit facility. On February 21, 2012, we issued $250 million of notes due in 2022. We intend to repay
the $200 million of notes due in August 2012 from cash on hand, cash generated from operations and proceeds from the 2012 offering.
We believe we are well positioned to meet our financial commitments and continue investing to grow the business.

METHANOL INDUSTRY INFORMATION

General

In 2011, approximately two-thirds of all methanol was used to produce formaldehyde, acetic acid and a variety of other chemicals
that form the foundation of a large number of chemical derivatives for which demand is influenced by levels of global economic
activity. These derivatives are used to manufacture a wide range of products, including plywood, particleboard, foams, resins and
plastics. The remainder of methanol demand is largely in the energy sector, principally in fuels applications (direct blending into
gasoline and cooking fuels), and as a feedstock in the production of DME, biodiesel and MTBE. We consider the emerging demand
for methanol-to-olefins (MTO) to be another energy application of methanol since methanol can be cost competitive relative to the
traditional production of olefins from naphtha.

Methanol is a commodity chemical and the methanol industry has historically been characterized by cycles of oversupply caused
by either excess supply or reduced demand, resulting in lower prices and idling of capacity, followed by periods of shortage and rising
prices as demand exceeds supply until increased prices lead to new plant investment or the restart of idled capacity.

The methanol market is global and, over the last several years, has become more complex and subject to increasingly diverse
influences due to the expanding number of uses for methanol and its derivatives around the world, combined with volatile global
energy prices and significant increases to capital costs for new methanol plants. The 2008 global recession had a significant negative
impact on demand in our industry, but through 2009 and 2010, demand for methanol improved significantly. In 2011, we estimate that
global demand for methanol grew 7%, notwithstanding the European debt crisis and uncertain global economic situation. See Demand
Factors below for more information.

Refer to the Risk Factors and Risk Management section of our 2011 MDéA for more information regarding risks related to
methanol price cyclicality and methanol demand, as well as the current uncertain economic environment and its impact on the
methanol industry and our Company.

Demand Factors

Reflecting the diversity of its uses, methanol demand is influenced by a wide range of economic, industrial, environmental, legal,
regulatory and other factors and risks. More recently, demand has also been influenced by energy prices due to the growing use of
methanol in energy applications.

We estimate that global demand for methanol in 2011, excluding methanol produced in integrated MTO facilities, increased by
about 7% to approximately 49 million tonnes. This increase was driven primarily by China, both in traditional chemical derivatives as
well as energy applications.

Overall, traditional chemical derivatives accounted for about half of the annual 2011 growth and grew by 5% year-over-year,
while energy demand accounted for the other half of the annual 2011 growth and grew by 11% year-over-year.

Chemical Derivative Demand

Historically, demand growth for methanol in chemical derivatives has been closely correlated to levels of industrial production.
The use of methanol derivatives such as formaldehyde and acetic acid in the building industry means that building and construction
cycles and the level of wood products production, housing starts, refurbishments and consumer spending are important factors in
determining demand for such derivatives. Demand is also affected by automobile production, durable goods production, industrial
investment and environmental and health trends, as well as new product development. Historically, chemical derivative demand for
methanol has been relatively insensitive to changes in methanol prices. We believe this demand inelasticity is due to the fact that there
are few cost-effective substitutes for methanol-based chemical derivative products and because methanol costs in most cases account
for only a small portion of the value of many of the end products. In 2011, chemical derivative demand represented approximately
two-thirds of total global demand.

Formaldehyde Demand

In 2011, methanol demand for the production of formaldehyde represented approximately 33% of global methanol demand. The
largest use for formaldehyde is as a component of urea-formaldehyde and phenol-formaldehyde resins, which are used as wood
adhesives for plywood, particleboard, oriented strand board, medium-density fibreboard and other reconstituted or engineered wood
products. There is also demand for formaldehyde as a raw material for engineering plastics and in the manufacture of a variety of
other products, including elastomers, paints, building products, foams, polyurethane and automotive products.

Acetic Acid Demand

In 2011, methanol used to produce acetic acid was approximately 11% of global methanol demand. Acetic acid is a chemical
intermediate used principally in the production of vinyl acetate monomer, acetic anhydride, purified terephthalic acid and acetate
solvents, which are used in a wide variety of products, including adhesives, paper, paints, plastics, resins, solvents, pharmaceuticals
and textiles.

Other Chemical Derivative Demand

The remaining chemical derivative demand for methanol is in the manufacture of methylamines, methyl methacrylate and a
diverse range of other chemical products that are ultimately used to make products such as adhesives, coatings, plastics, film, textiles,
paints, solvents, paint removers, polyester resins and fibres, explosives, herbicides, pesticides and poultry feed additives. Other end
uses include silicone products, aerosol products, de-icing fluid, windshield washer fluid for automobiles and antifreeze for pipeline
dehydration.

Energy and Other Chemical Demand

There are several energy-related uses for methanol that have developed more recently and many of these have experienced
substantial growth. We believe that these energy-related uses have the potential to grow further, particularly in an environment of
higher energy prices. These include direct blending of methanol into gasoline (primarily in China), DME and biodiesel. In addition,
due to favourable economics, methanol-to-olefins (MTO) is rapidly emerging in China as a substitute for naphtha-based olefins.
Methanol has also been used to make MTBE, a gasoline additive, for many years.

In 2011, methanol demand for energy-related uses continued to grow in the high energy demand environment and represented
approximately 34% of total global demand. This 34% was comprised of methanol for the production of MTBE, which represented
about 12% of 2011 demand, while other energy applications, including direct blending of methanol into gasoline, DME and biodiesel,
accounted for approximately 22% of 2011 demand (compared to 20% in 2010). Fuel applications and DME were the fastest-growing
end-use segments for methanol in 2011, with methanol fuels demand growing at approximately 16% and methanol into DME growing
at 14%.

10

Methanol Demand for Fuel

Methanol may be blended into gasoline for use as a transportation fuel to reduce reliance on imported oil products and because of
its clean air benefits and competitive pricing relative to gasoline. Methanol-gasoline blending in China has grown rapidly and
significantly over the last several years. In addition, smaller quantities of methanol are also used directly as a cooking fuel. In 2011,
we estimate that methanol demand for these fuel applications in China was approximately 5.3 million tonnes (compared to
approximately 4.5 million tonnes in 2010). Chinese demand for methanol blending into gasoline has remained strong due to the
favourable economics of methanol compared to other gasoline components as well as China”s continued economic growth in 2011,
which has boosted automobile sales and thus gasoline demand. Chinese gasoline prices have remained high in relation to methanol
prices, and profits for fuel blenders in China have continued to be healthy through 2011. The Chinese government also continues to
introduce industry standards that support the use of methanol as a fuel. National standards for M-100 and M-85 methanol gasoline
(100% methanol and 85% methanol blends) took effect in 2009. Provincial M-15 standards are already in place in nearly half of
China”s 27 provinces and provincial standards are also in place for other methanol blends, varying from M-5 to M-100. We believe
that these standards will provide a further catalyst to grow methanol fuel blending in China. We also understand that certain Chinese
provincial and national government organizations are conducting further research and trials using methanol as a transportation fuel.

No countries outside China are actively blending methanol into gasoline on the scale seen in China. However, 3% methanol
blends have been allowed for many years in Europe under the EN228 standard and a number of other countries have been exploring
fuel-blending programs. In addition, some major auto companies in Europe and Asia and some government bodies are conducting
research and trials related to the use of methanol as a transportation fuel.

DME Demand

DME is a clean-burning fuel that can be stored and transported like liquefied petroleum gas (LPG). DME, which is typically
produced from methanol, can be blended up to approximately 20% with LPG and used for household cooking and heating. DME has
experienced rapid growth for blending into LPG and we believe it will continue to show strong growth in coming years, particularly in
China and in an environment of higher energy prices. DME can also be used as a clean-burning substitute for diesel fuel in
transportation. However, while the technology for using DME as a diesel fuel substitute is well advanced, it has not yet entered
widespread commercialization. In 2011, the new “DME as city gas” national standard was implemented in China, which will further
support the development of the DME industry there. In 2011, global methanol demand for use in DME was estimated at
approximately 3.5 million tonnes (compared to 3.0 million tonnes in 2010). DME projects are also in development in regions outside
of China.

Biodiesel Demand

Biodiesel is a renewable fuel made from plant oils or animal fats that requires an alcohol, such as methanol, as part of the
production process. As well, a significant quantity of methanol is consumed to manufacture the catalyst used to produce biodiesel. In
2011, global demand for methanol use in biodiesel was estimated at 1.9 million tonnes (compared to 1.6 million tonnes in 2010). We
expect future growth in biodiesel will be driven primarily by higher energy prices and government programs to promote a renewable
alternative to petroleum fuels, such as the implementation of the Renewable Fuel Standard (RFS2) regulations in the United States.
The RFS2 mandates the use of certain volumes of renewable fuels to be blended into the US transportation fuel pool and had a
positive impact on US biodiesel demand growth in 2011.

MTBE Demand

MTBE is used primarily as a source of octane and as an oxygenate for gasoline to reduce the amount of harmful exhaust
emissions from motor vehicles.

Environmental concerns and legislative action in the United States related to gasoline leaking into water supplies from
underground gasoline storage tanks led to the phase-out of MTBE as a gasoline additive in the United States in 2006. In addition,
governmental efforts in recent years in some other jurisdictions, primarily in the European Union, Japan and Latin America, to
promote biofuels and alternative fuels through legislation are putting competitive pressures on the use of MTBE in gasoline in these
countries. This has resulted in some MTBE producers switching production to ethyl tert-butyl ether (“ETBE”) to access biofuels
incentives. However, MTBE remains a competitive and efficient oxygenate providing clean air benefits. Countries facing significant
gasoline demand growth as well as environmental concerns – such as China – are generating an increasingly strong MTBE demand.
As a result, over the past two to three years, some oxygenate producers have converted back to MTBE and new MTBE capacity has
been added in China to satisfy this growing demand. We believe that global demand for MTBE should remain relatively stable or
increase slightly.

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Methanol-to-Olefins (MTO)

Light olefins (ethylene and propylene) are the basic building blocks to make many plastics. Olefins can be produced from various
feedstocks, including naphtha, LPG, ethane and methanol. Ethylene and propylene are further processed to produce polyethylene and
polypropylene, both of which have wide application in packaging, textiles, plastic parts and containers and automotive components.
Polypropylene, in particular, is experiencing fast-growing global demand growth. In China, olefins have historically been produced in
naphtha-based steam cracker complexes. Over the past year, methanol demand into olefins emerged as a significant methanol
derivative. China is leading the commercialization of MTO, and at current energy prices, the process is cost competitive relative to the
traditional production of olefins from naphtha. The first MTO plant in China started up in 2010, and there are now four plants
operating in China, consuming over five million tonnes of methanol annually. Three of these projects were not expected to impact the
merchant methanol market as they are integrated projects – coal to methanol to olefins. However, over the past year, these plants have
purchased methanol to supplement their own methanol production. The one non-integrated plant is dependent on merchant methanol
supply. A number of non-integrated projects are currently being planned in China and would be dependent on merchant methanol
supply. If these projects go ahead, they could significantly impact the global supply and demand balance of methanol.

Regulatory Developments Affecting Demand

There are various studies and legislative proposals currently under way in a number of countries with respect to the
carcinogenicity classification of, and the reduction of permitted exposure levels for, methanol, formaldehyde and MTBE. Such studies
and proposals could lead to regulatory or other actions that could materially reduce demand for methanol. Refer to the Risk Factors
and Risk Management section of our 2011 MDKéA for more information regarding risks to methanol demand related to regulatory
developments.

Supply Factors

While a significant amount of new methanol capacity has come on stream over the past several years, a large number of methanol
producers with higher cost structures have shut down plants. Methanol is predominantly produced from natural gas and is also
produced from coal, particularly in China. In addition, the industry has historically operated significantly below stated capacity on a
consistent basis, even in periods of high methanol prices, due primarily to shutdowns for planned and unplanned repairs and
maintenance as well as shortages of feedstock and other production inputs.

Newer world-scale methanol plants have generally been constructed in remote coastal locations with access to lower cost
feedstock, although this advantage is sometimes offset by higher distribution costs due to their distance to major markets. As regional
natural gas prices fluctuate and shipping costs escalate, there may be a greater incentive to build new methanol capacity closer to
customers in major markets. There is typically a span of four to six years to plan and construct a new world-scale methanol plant. As
well, additional methanol supply can potentially become available by restarting methanol plants whose production has been idled,
relocating methanol plants to lower production cost locations, carrying out major expansions of existing plants and de-bottlenecking
existing plants to increase their production capacity.

Typical of most commodity chemicals, periods of high methanol prices encourage high cost producers to operate at maximum
rates and also encourage the construction of new plants and expansion projects, leading to the possibility of oversupply in the market.
However, historically, many of the announced capacity additions have not been constructed for a variety of reasons. There are
significant barriers to entry in this industry. The construction of world-scale methanol facilities requires significant capital over a long
lead time, a location with access to significant natural gas or coal feedstock with appropriate pricing, and an ability to cost-effectively
and reliably deliver methanol to customers.

During 2011, there were two significant methanol production capacity additions outside of China that totalled approximately 1.7
million tonnes, comprising our own 1.26 million tonne Egypt plant and 0.47 million tonne Medicine Hat plant. Over the next two-year
period to the end of 2013, it is projected that new methanol capacity, restarts and expansions outside of China will add approximately
2.6 million tonnes of capacity to the global industry. We believe that this increase in capacity will be offset by global demand growth
outside of China.

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With respect to China, we estimate that approximately 3.0 million tonnes of net new capacity was added in 2011. Over the next
two-year period to the end of 2013, we anticipate that approximately 6.0 million tonnes of net new capacity will be added and that
idled capacity will be required to restart to meet growing domestic methanol demand in China. The Chinese methanol industry has
historically operated at low rates due to various constraints related to feedstock availability, weather restrictions (typically during
winter) and technical/operational issues. There has also been increasing pressure on the Chinese methanol industry”s cost structure as
a result of escalating feedstock costs for both coal and natural-gas-based producers. We believe that in an environment of high global
energy prices and growing industrial production, methanol demand in China should continue to grow at healthy rates. This will more
than offset increases of domestic production in China and we anticipate that imports of methanol into China will remain high over the
coming period.

Methanol Prices

Methanol is an internationally traded commodity. Methanol prices have historically been cyclical and sensitive to overall
production capacity relative to demand, the price of feedstock (primarily natural gas or coal), energy prices and general economic
conditions. The following chart shows published methanol contract prices (in United States dollars per tonne) in the United States
Gulf, Western Europe and Asia:

CMAI US GULF AND WESTERN EUROPE METHANOL CONTRACT PRICES AND
METHANEX ASIAN POSTED CONTRACT PRICES (APCP)
JANUARY 2003 TO JANUARY 2012
1000

900

800 p

700 me
600 7 |
3 500 Ea
E j a Se

300

100

0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

— US Guif Contract $/MT –W Europe Contract $/MT — Methanex Asian Posted Contract Price (APCP) $/MT

Methanol prices in the United States, Europe and Asia Pacific have largely tracked each other. The majority of methanol sold
globally is priced with reference to various published regional contract prices to which discounts may be applied. While there is a
significant spot market in Asia and an appreciable spot market in Europe, the spot markets in North America and Latin America are
relatively small in relation to the total volume of methanol traded.

The methanol industry is highly competitive and prices are affected by supply and demand fundamentals. We publish regional
non-discounted reference prices for each major methanol market and these posted prices are reviewed and revised monthly or
quarterly based on industry fundamentals and market conditions. Most of our customer contracts use published Methanex reference
prices as a basis for pricing, and we offer discounts to customers based on various factors. Our average non-discounted published
reference price for 2011 was $440 per tonne compared with $356 per tonne in 2010. Our average realized prices of $374 per tonne for
2011 and $306 per tonne for 2010 were 15% and 14%, respectively, lower than the average non-discounted published prices.

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PRODUCTION

Production Process

The methanol manufacturing process used in our facilities typically involves heating natural gas, mixing it with steam and passing
it over a nickel catalyst where the mixture is converted into carbon monoxide, carbon dioxide and hydrogen. This reformed gas (also
known as synthesis gas or syngas) is then cooled, compressed and passed over a copper-zinc catalyst to produce crude methanol.
Crude methanol consists of approximately 80% methanol and 20% water by weight. To produce chemical-grade methanol, crude
methanol is distilled to remove water, higher alcohols and other impurities.

Operating Data and Other Information

We endeavour to operate our production facilities around the world in an optimal manner to lower our overall delivered cost of
methanol. Scheduled shutdowns of plants typically occur every three or more years and are necessary to change catalysts or perform
maintenance activities that cannot otherwise be completed with the plant operating (a process commonly known as a turnaround), and
these shutdowns typically take between three and five weeks. Catalysts generally need to be changed every six years, although there is
flexibility to extend catalyst life if conditions warrant. Careful planning and scheduling is required to ensure that maintenance and
repairs can be carried out during turnarounds. In addition, both scheduled and unscheduled shutdowns may also occur between
turnarounds. We prepare a comprehensive eight-year turnaround plan that is updated annually for all of our production facilities.

The following table sets forth the annual production capacity and actual production for our facilities that operated for the last two
years (in the case of Atlas and Egypt, the table reflects our equity interest share of 63.1% and 60%, respectively):

Annual
Production 2011 2010
Year Built Capacity” Production Production
(000 tonnes/year) | (000 tonnes) | (000 tonnes)
Chile
Chile I 1988 882 – –
Chile II 1996 990 – 159
Chile HI 1999 1,088 554 776
Chile IV 2005 840 – –
Trinidad
Titan 2000 900 711 891
Atlas? 2004 1,150 891 884
New Zealand
Motumui 16 1985 850 – –
Motunui 2% 1985 850 830 830
Waitara Valley 1983 530 – –
Egypt” 2011 760 532 –
Medicine HatC” 1981 470 329 –
Total 9,310 3,847 3,540

(1) The stated production capacity for our facilities may be higher than original nameplate capacity as, over time, these figures have been adjusted to reflect ongoing
operating efficiencies at these facilities.

(2) The production capacity represents our 63.1% interest in the Atlas methanol facility; our partner, BP, owns 36.9%.

(3) In January 2012, we announced our intention to restart the Motunui 1 facility in mid-2012. Due to the current distillation capacity constraints at the Motunui site,
the combined operating capacity of both plants is approximately 1.5 million tonnes, which is lower than the combined nameplate capacity shown above of 1.7
million tonnes.

(4) The production capacity represents our 60% interest in the Egypt methanol facility and our partners own the remaining 40%. This facility commenced commercial
operations in March 2011.

(5) The Medicine Hat facility was idled in 2001 and was restarted in April 2011.

Refer to the Production Summary section of our 2011 MDA for more information.

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MARKETING

We sell methanol on a worldwide basis to every major market through an extensive marketing and distribution system with
marketing offices in North America (Vancouver and Dallas), Europe (Brussels), Asia Pacific (Hong Kong, Shanghai, Tokyo, Beijing
and Seoul), Latin America (Santiago, Chile), and the Middle East (Dubai, UAE). Most of our customers are large global or regional
petrochemical manufacturers or distributors. Refer to the Risk Factors and Risk Management section of our 2011 MDéA for more
information regarding customer credit risk.

We believe our ability to sell methanol from a number of geographically dispersed production sites enhances our ability to secure
major chemical and petrochemical producers as customers for whom reliability of supply and quality of service are important. Our
global network of marketing offices, together with storage and terminal facilities and worldwide shipping operations, also allow us to
provide larger customers with multinational sourcing of product and other customized arrangements.

In addition to selling methanol that we produce at our own facilities, we also sell methanol that we purchase from other suppliers
through methanol purchase agreements and on the spot market. We do this to meet customer needs, support our marketing efforts and
build our sales base prior to bringing on our own new capacity.

DISTRIBUTION AND LOGISTICS

The majority of our methanol production facilities around the world are located adjacent to deepwater ports. Methanol is pumped
from our coastal plants by pipeline to these ports for shipping. We currently own or manage a fleet of 19 ocean-going vessels to ship
this methanol. We lease or own in-region storage and terminal facilities in the United States, Canada, Europe, Latin America and Asia.
We also use barge, rail and, to a lesser extent, truck transport in our delivery system.

To retain optimal flexibility in managing our shipping fleet, we have entered into short-term and long-term time charter
agreements covering vessels with a range of capacities. We also ship methanol under contracts of affreightment and through spot
arrangements. We use larger vessels as key elements in our supply chain to move product from our production facilities to storage
facilities located in major ports and for direct delivery to some customers. We also use smaller vessels capable of entering into
restricted ports to deliver directly to other customers.

The cost to distribute methanol to customers represents a significant component of our operating costs. These include costs for
ocean shipping, storage and distribution. We are focused on identifying initiatives to reduce these costs and we seek to maximize the
use of our shipping fleet to reduce costs. We take advantage of prevailing conditions in the shipping market by varying the type and
length of term of ocean vessel charter contracts. We are continuously investigating opportunities to further improve the efficiency and
cost-effectiveness of distributing methanol from our production facilities to customers. We also look for opportunities to leverage our
global asset position by entering into product exchanges with other methanol producers to reduce distribution costs.

Our Atlas and Titan plants in Trinidad are ideally located to supply customers in the United States and Europe. Our plant in
New Zealand supplies customers in the Asia Pacific region. Our production site in Chile can supply all global regions due to its
geographic location. Our Egypt plant, which began operations in 2011, primarily services our European markets, but can also supply
Asia and North America. Our Medicine Hat plant, which was restarted in April 2011, serves our customer base in North America.

Due to the natural gas curtailments at our Chilean facilities that have caused the loss of a significant amount of our Chilean
production since 2007, we have had excess shipping capacity that is subject to fixed time charter costs. We have been mitigating some
of these costs by entering into sub-charters and third-party backhaul arrangements.

NATURAL GAS SUPPLY

General

Natural gas is the principal feedstock for methanol at our production facilities and accounts for a significant portion of our total
production costs. Accordingly, our profitability depends in large part on both the security of supply and the price of natural gas. An
important part of our strategy is to ensure long-term security of supply of natural gas feedstock. If, for any reason, we are unable to
obtain sufficient natural gas for any of our plants on commercially acceptable terms or there are interruptions in the supply of
contracted natural gas to our facilities, we could be forced to curtail production or close such plants. Refer to the Risk Factors and
Risk Management – Security of Natural Gas Supply and Price section of our 2011 MDéA.

15

Most of the natural gas supply contracts for our production facilities are “take-or-pay” contracts denominated in United States
dollars that include base and variable price components to reduce our commodity price risk exposure. “Take-or-pay” means that we
are obliged to pay for the gas supply regardless of whether or not we take delivery. Such commitments are typical in the methanol
industry. These contracts generally provide a quantity that is subject to take-or-pay terms that is lower than the maximum quantity that
we are entitled to purchase. For all of our production facilities except Medicine Hat, the natural gas supply contracts have pricing
terms with base and variable price components. The variable price component of each gas contract is adjusted by a formula related to
methanol prices above a certain level. We believe this pricing relationship enables these facilities to be competitive throughout the
methanol price cycle and provides gas suppliers with attractive returns.

Chile

Since 2007, we have operated our methanol facilities in Chile significantly below site capacity primarily due to curtailments of
natural gas supply from Argentina. In June 2007, our natural gas suppliers from Argentina curtailed all gas supply to our plants in
Chile in response to various actions by the Argentinean government, including imposing a large increase to the duty on natural gas
exports. Under the existing circumstances, we do not expect to receive any further natural gas supply from Argentina. As a result of
the Argentinean natural gas supply issues, all of the methanol production at our Chile facilities since June 2007 has been produced
with natural gas from Chile.

We have a number of existing long-term supply agreements in place with the state-owned energy company Empresa Nacional del
Petroleo (“ENAP”) that have expiration dates that range from 2017 to 2025 and represent 20% of the contracted natural gas supply for
our Chilean facilities when operated at capacity. Over the last few years, ENAP has delivered significantly less than the full amount of
natural gas that it was obligated to deliver under these contracts.

Our primary goal is to progressively increase production at our Chile site with natural gas from suppliers in Chile. We are
pursuing investment opportunities with ENAP, GeoPark Chile Limited (“GeoPark”) and others to help accelerate natural gas
exploration and development in southern Chile. We are working with ENAP to develop natural gas in the Dorado Riquelme block in
southern Chile. Under the arrangement, we fund a 50% participation in the block; at the end of 2011, we had contributed
approximately $106 million. Over the past few years, we have also provided $57 million in financing to GeoPark (of which
approximately $40 million had been repaid by the end of 2011) to support and accelerate GeoPark’s natural gas exploration and
development activities in southern Chile. GeoPark has agreed to supply us with all natural gas sourced from the Fell block in southern
Chile under a ten-year exclusive supply arrangement that began in 2008. Approximately 75% of total production at our Chilean
facilities in 2011 was produced with natural gas supplied from the Fell and Dorado Riquelme blocks.

Other investment activities are also supporting the acceleration of natural gas exploration and development in areas of southern
Chile. Over the past few years, the Government of Chile has completed international bidding rounds to assign oil and natural gas
exploration areas that lie close to our production facilities and announced the participation of several international oil and gas
companies. For two of the exploration blocks, we are participating in a consortium with other international oil and gas companies with
GeoPark as the operator. We have approximately a 15% participation in the consortium and at the end of 2011, we had contributed $9
million for our share of the exploration costs.

Our methanol facilities in Chile produced 0.55 million tonnes of methanol in 2011 compared to 0.94 million tonnes in 2010.
During 2011, natural gas deliveries were lower than 2010 primarily as a result of declines in deliverability from existing wells. As we
entered 2012, we were operating one plant at approximately 40% capacity at our Chile site and we are working closely with ENAP to
manage through the seasonality of gas demand with the objective of maintaining operations through the winter season of 2012. While
significant investments have been made in the last few years for natural gas exploration and development in southern Chile, the
timelines for a significant increase in gas deliveries to our plants are much longer than we originally anticipated and existing fields are
experiencing declines. As a result, we expect there to be short-term pressure on gas supply in southern Chile that could impact the
operating rate of our Chile site, particularly in the southern hemisphere winter months when residential energy demand is at its peak.

We are also examining the viability of other projects to increase the utilization of our Chilean assets. We are planning to relocate
one of the idle Chile methanol plants with a capacity of approximately 1.0 million tonnes to the Gulf Coast area of the United States.
We recently announced that we have secured land in Geismar, Louisiana and are progressing site-specific engineering works. We
expect to make a final investment decision in the third quarter of 2012 and the plant to be operational in late 2014. We are also
continuing to examine the viability of utilizing coal gasification as an alternative feedstock in Chile.

Refer to the Risk Factors and Risk Management – Chile section of our 2011 MDézA for more information.

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Trinidad

Our equity interest in two methanol facilities in Trinidad (Atlas and Titan) represents approximately 2.05 million tonnes of annual
capacity. Natural gas for these facilities is sourced from gas fields that are located off the coast of Trinidad. These fields are operated
by major international oil and gas companies. The National Gas Company of Trinidad and Tobago Limited (“NGC”) transports the
gas by pipeline to a processing facility located near our facilities and from there it is distributed and sold under individual contracts to
industrial consumers.

Natural gas is supplied to our facilities under contracts with NGC, which purchases the gas from gas producers under
back-to-back purchase arrangements. Titan”s take-or-pay gas supply contract with NGC expires in 2014, with an option to renew for a
further five years subject to availability of gas and agreement on price. The price paid for gas by the Titan plant is based on a fixed
escalation of a minimum US dollar base price plus a variable price component that is determined with reference to average published
industry methanol prices each quarter. Under the contract, NGC is obligated to supply, and we are obligated to take-or-pay for, a
specified annual quantity of natural gas. Gas paid for, but not taken, by the Titan plant in any year may be received in subsequent
years subject to some limitations. We have recently experienced some natural gas curtailments to the Titan plant due to a mismatch
between upstream commitments to supply NGC and downstream demand from NGC”s customers which becomes apparent when an
upstream technical problem arises. We are engaged with key stakeholders to find a solution to the issue, but in the meantime, we
expect to experience some gas curtailments to our Trinidad site. The Atlas plant’s gas contract with NGC expires in 2024 and the price
formula and take-or-pay obligations are similar to those found in Titan’s gas contract.

New Zealand

We have three plants in New Zealand with a total production capacity of 2.2 million tonnes. Two 850,000 tonne per year plants
are located at Motunui and the remaining 530,000 tonne per year plant is located nearby, at Waitara Valley. In 2004 we idled our two
Motunui plants but continued to operate the Waitara Valley plant until October 2008 to match natural gas supply availability. In
October 2008, we restarted one plant in Motunui and idled the Waitara Valley plant, and we have been operating the single Motunui
plant since that time. The Motunui plant produced 830,000 tonnes of methanol during 2011. In January 2012, we committed to restart
the second Motunui methanol plant in mid-2012. Due to distillation constraints at the Motunui site, the combined annual production
capacity of the two Motunui plants is currently limited to 1.5 million tonnes of methanol.

Our ability to obtain significant volumes of competitively priced natural gas has improved over the past several years owing to the
much-improved gas supply fundamentals in New Zealand. Gas exploration has increased significantly in recent years and the gas
fields near our plants benefit from having high-value natural gas liquids, creating a strong incentive for exploration and development
activities.

We have currently acquired sufficient amounts of natural gas from various suppliers to allow us to produce about half the annual
production capacity at the Motunui site until late 2013. In addition, we have also entered into a 10-year natural gas supply agreement
with Todd Energy that underpins the restart of the second Motunui plant and that is expected to allow us to produce up to about half
the Motunui site?s annual methanol capacity. The Todd contract illustrates the improved natural gas supply dynamics in New Zealand.

We continue to pursue opportunities to obtain competitively priced natural gas with suppliers in New Zealand and believe we will
be able to access sufficient volumes of natural gas to allow us to continue to operate both plants at the Motunui site over the long term
and, potentially, to restart the idled Waitara Valley plant.

We also continue to pursue opportunities to accelerate the exploration and development of natural gas in the area close to our
plants. During 2011, we progressed the analysis of natural gas exploration prospects with Kea Petroleum (“Kea”), an oil and gas
exploration and development company with licences and permits to explore areas of the Taranaki basin in New Zealand close to our
plants. Under the agreement with Kea, funding is shared 50% by both parties, and we will be entitled to all natural gas deliveries from
our participation at a price that is competitive to our other locations in Trinidad, Chile and Egypt. We can elect to provide funding on a
project by project basis and we have agreed to jointly fund an onshore exploration well with Kea, expected to be drilled during 2012.

Egypt

We have a 25-year, take-or-pay natural gas supply agreement for a 1.26 million tonne per year methanol plant that we have
constructed in Egypt. The plant began commercial production in March 2011. The price paid for gas is based on a US dollar base price
plus a variable price component that is determined with reference to methanol prices. Under the contract, the gas supplier is obligated
to supply and we are obliged to take-or-pay for, a specified annual quantity of natural gas. Gas paid for, but not taken, in any year may
be received in subsequent years subject to limitations.

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Canada

We have a 470,000 tonne per year plant in Medicine Hat, Alberta that was idled in 2001 due to high natural gas feedstock prices
in North America. During the past few years there have been improvements in natural gas supply in North America that have provided
the opportunity to secure sufficient natural gas on commercially acceptable terms to enable a restart of this facility. The plant returned
to production in April 2011.

We currently have a program in place to purchase natural gas on AECO – the Alberta gas trading market – and we believe that the
long-term natural gas dynamics in North America will support the long-term operations of this facility.

FOREIGN OPERATIONS AND GOVERNMENT REGULATION

General

We have substantial operations and investments outside of North America, and as such we are affected by foreign political
developments and federal, provincial, state and other local laws and regulations. To date, we believe we have complied in all material
respects with governmental requirements. We are subject to risks inherent in foreign operations, including loss of revenue, property
and equipment as a result of expropriation; import or export restrictions; anti-dumping measures; nationalization, war, civil unrest,
insurrection, acts of terrorism and other political risks; increases in duties, taxes and governmental royalties; renegotiation of contracts
with governmental entities; as well as changes in laws or policies or other actions by governments that may adversely affect our
operations.

We derive the majority of our revenue from production and sales by subsidiaries outside of Canada, and the payment of dividends
or the making of other cash payments or advances by these subsidiaries to us may be subject to restrictions or exchange controls on
the transfer of funds in or out of the respective countries or result in the imposition of taxes on such payments or advances. We have
organized our foreign operations in part based on certain assumptions about various tax laws (including capital gains and withholding
taxes), foreign currency exchange and capital repatriation laws and other relevant laws of a variety of foreign jurisdictions. While we
believe that such assumptions are reasonable, we cannot provide assurance that foreign taxation or other authorities will reach the
same conclusion. Further, if such foreign jurisdictions were to change or modify such laws, we could suffer adverse tax and financial
consequences.

The dominant currency in which we conduct business is the United States dollar, which is also our reporting currency. The most
significant components of our costs are natural gas feedstock and ocean-shipping costs and substantially all of these costs are incurred
in United States dollars. Some of our underlying operating costs and capital expenditures, however, are incurred in currencies other
than the United States dollar, principally the Canadian dollar, the Chilean peso, the Trinidad and Tobago dollar, the New Zealand
dollar, the Euro and the Egyptian pound. We are exposed to increases in the value of these currencies that could have the effect of
increasing the United States dollar equivalent of cost of sales and operating expenses and capital expenditures. A portion of our
revenue is earned in Euros, Canadian dollars and British pounds. We are exposed to declines in the value of these currencies compared
to the United States dollar, which could have the effect of decreasing the United States dollar equivalent of our revenue.

Trade in methanol is subject to duty in a number of jurisdictions. Methanol sold in China from any of our producing regions is
currently subject to duties ranging from 0% to 5.5%. In 2010, the Chinese Ministry of Commerce investigated allegations made by
domestic Chinese producers related to dumping into China of imported methanol. In December 2010, the Ministry recommended that
duties of approximately 9% be imposed on methanol imports from New Zealand, Malaysia and Indonesia for five years starting from
December 24, 2010. However, citing special circumstances, the Customs Tariff Commission of the State Council, which is China”s
chief administrative authority, suspended enforcement of the recommended dumping duties with the effect that methanol will continue
to be allowed to be imported from these three countries without the imposition of additional duties. If the suspension is lifted, we do
not expect there to be a significant impact on industry supply/demand fundamentals and we would realign our supply chain.

Methanol from Chile that is sold in Korea and Japan, two of the other major methanol markets in Asia, is not subject to duties.
Free trade agreements allow methanol from Chile to be sold duty-free into North America and the European Union. Methanol from
Trinidad may also be sold duty-free into Japan, North America and the European Union. Currently, the costs we incur in respect of
duties are not significant. However, there can be no assurance that the duties that we are currently subject to will not increase, that the
suspension of Chinese dumping duties will not be lifted, that duties will not be levied in other jurisdictions in the future or that we will
be able to mitigate the impact of future duties, if levied.

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Chile

Our wholly owned subsidiary, Methanex Chile S.A. (“Methanex Chile”), owns the four methanol plants on our Chilean
production site. Chilean foreign investment regulations provide certain benefits and guarantees to companies that enter into a foreign
investment contract (“DL 600 Contract”) with Chile. Methanex Chile has entered into four DL 600 Contracts, substantially identical in
all matters material for Methanex Chile, one for each of the plants. Under the DL 600 Contracts, Methanex Chile is authorized to
remit from Chile, in United States dollars or any other freely convertible currency, all or part of its profits and, after one year, its
equity. As well, under the DL 600 Contracts, Methanex Chile has elected to pay income tax at the general applicable rate, currently
35%. The DL 600 Contracts provide that they cannot be amended or terminated except by written agreement.

Please also refer to the Natural Gas Supply – Chile section starting on page 16 for a discussion of the imposition of a significant
increase to the duty on exports of natural gas from Argentina to Chile.

Trinidad

Our Atlas plant was declared an approved enterprise under the Fiscal Incentives Act of Trinidad and was granted, for a ten-year
period beginning in 2004, total relief from corporate income tax for the first two years of operation, a rate of 15% for the following
five years and a rate of 20% for the following three years. Atlas also has total relief from income tax on dividends or other
distributions out of profits or gains derived from the manufacture of methanol (other than interest) and has been granted import duty
concessions on building materials and machinery and equipment imported into Trinidad and used in connection with the facility. The
applicable corporate income tax rate without tax relief is currently 35%.

New Zealand

New Zealand has enacted legislation to safeguard claims by Maori tribes (the indigenous people of New Zealand) against lands
previously owned by state-owned enterprises and subsequently privatized. The land on which certain parts of the infrastructure for the
Waitara Valley and Motunui plants are located (for example, a tank farm and various pipelines and pipeline valve and mixing stations)
is subject to this legislation. There is a possibility that the tribunal that deals with Maori land claims could recommend the return of
such land to Maori ownership. The New Zealand government would be required to comply with such a recommendation, subject to
payment of compensation to the affected owner. We believe that, subject to receiving adequate compensation, such a forced
divestment would not likely have a material adverse effect on our operations or financial condition. The land upon which the Waitara
Valley and Motunui plants are located and the surrounding buffer zones of farmland owned by us are not subject to such forced
divestment procedures.

Egypt
The Egypt plant is subject to domestic Egyptian tax laws, including a tax on earnings that is currently at a rate of 25%.

During 2011, Egypt experienced periods of anti-government protests and civil unrest and in November 2011, for the safety and
security of our employees, we took the decision to temporarily curtail operations of the methanol plant in Damietta, Egypt. The plant
restarted in December and has since then operated at near full capacity. (Refer to the Risk Factors and Risk Management section of
our 2011 MD4zA for more information.)

RESPONSIBLE CARE

As a member of the Chemistry Industry Association of Canada (“CIAC”), the American Chemistry Council, Asociacion Gremial
de Industriales Quimicos de Chile, Responsible Care New Zealand and Gulf Petrochemicals and Chemicals Association, and as a
signatory to the Association of International Chemical Manufacturers Responsible Care Manifesto (China), we are committed to the
ethics and principles of Responsible Care.

Responsible Care is the umbrella under which we manage issues related to health, safety, the environment, community
involvement, social responsibility, security and emergency preparedness at each of our facilities and locations.

Accordingly, we have established policies, systems and procedures to promote and encourage the responsible development,
introduction, manufacture, transportation, storage, handling, distribution, use and ultimate disposal of chemicals and chemical
products so as to do no harm to human health and well-being, the environment and the communities in which we operate while
striving to improve the environment and people’s lives.

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Methanex’”s Responsible Care/Social Responsibility (“RC/SR”) policies and programs are based on CIAC”s RC Ethic and
Principles for Sustainability and the CIAC RC Codes of Practice. Some of the countries where we operate have different standards
than those applied in North America. Our policy is to adopt the more stringent of either Responsible Care practices or local regulatory
or association requirements at each of our facilities. As a signatory to the CIAC RC Ethic and Principles for Sustainability, we
subscribe to CIAC”s statement of sustainability: “We dedicate ourselves, our technology and our business practices to sustainability –
the betterment of society, the environment and the economy”.

Sound corporate governance is the foundation of our long-term success and the sustainability of our operations. Our corporate
governance policies ensure that we have strong management and clear direction for all of Methanex”s business affairs. The application
of Responsible Care begins with our Board of Directors, where we have a Responsible Care Committee, and extends throughout our
organization.

The Company’s Board of Directors and senior management team establish the direction for Methanex”s RC/SR practices. The
Board’s Responsible Care Committee oversees RC program performance and issues at the policy level, while the Public Policy
Committee provides focus on the SR program. The two committees consider ethics, accountability, governance, business relationships,
products and services, community involvement and the protection of people and the environment. The Senior Vice President,
Corporate Resources has overall responsibility for Methanex”s RC/SR policies and programs, ensuring that they align with the
Board’s requirements and the Company”s business strategy. These programs are directed and managed by the Director, Responsible
Care and the Director, Government $ Public Affairs, who lead Methanex”s Global Responsible Care Team and Global Public Policy
Team, respectively.

Methanex evaluates the performance of its RC/SR management system through internal and third-party external audit and
assessment programs. The internal program includes ongoing in-region self-audits as well as a global audit conducted by Methanex
subject matter experts every three years. Third-party verification of the performance of Methanex”s RC/SR program occurs every
three years through the CIAC RC verification process. The most recent third-party verification was successfully completed in 2011.

We have an established Environment Policy that requires that our facilities have systems in place to monitor and comply with all
local environmental regulations as well as internal standards, periodically audit environmental performance and compliance, measure
environmental performance against key performance indicators, report incidents with the potential to cause environmental harm, and
demonstrate continual improvement. A Greenhouse Gas (“GHG”) Management Policy was introduced in 2010 in order to identify and
address the risks associated with GHG emissions. The policy directs the Company to consider the GHG-related risks when assessing
new investments, improve reliability and utilization performance, evaluate energy-efficiency improvement opportunities and keep an
inventory of GHG emissions. These policies are reviewed at least biennially and are endorsed by the Board of Directors and approved
by the Company”s senior management team.

We have also adopted a number of risk assessment tools that are formally applied as part of our normal business processes to
identify and mitigate current and future environmental and process safety-related risks. When incidents do occur, we have a formal
incident investigation process that ensures effective mitigation as well as application of lessons learned throughout our organization.

As a natural extension of our RC ethic, we have a Social Responsibility Policy that aligns our corporate governance, employee
engagement and development, community involvement and social investment strategies with our core values and corporate strategy.
Specifically, our RC Policy commits the Company to recognize and respond to community concerns about the manufacture, storage,
handling, transportation and disposal of our products and promptly provide information concerning any potential health or
environmental hazard to the appropriate authorities, employees and all stakeholders. Methanex”s Social Responsibility Policy further
commits the Company to have an open, honest, proactive relationship in the communities where we have a significant presence; to be
accountable and responsive to the public; to have effective processes to identify and respond to community concerns; and to inform
the community of risks associated with our operations.

We believe that Responsible Care helps us achieve safe and reliable operations, which in turn results in strong financial
performance, effective and innovative minimization of environmental impacts and improved quality of life, particularly in
communities where our employees reside.

ENVIRONMENTAL MATTERS

The countries in which we operate all have laws and regulations to which we are subject governing the environment and the
management of natural resources as well as the handling, storage, transportation and disposal of hazardous or waste materials. We are
also subject to laws and regulations governing emissions and the import, export, use, discharge, storage, disposal and transportation of
toxic substances. The products we use and produce are subject to regulation under various health, safety and environmental laws.
Non-compliance with these laws and regulations may give rise to work orders, fines, injunctions, civil liability and criminal sanctions.

20

As a result of periodic external and internal audits, we believe that we materially comply with all existing environmental, health
and safety laws and regulations to which our operations are subject. Laws and regulations protecting the environment have become
more stringent in recent years and may, in certain circumstances, impose absolute liability rendering a person liable for environmental
damage without regard to negligence or fault on the part of such person. Such laws and regulations may also expose us to liability for
the conduct of, or conditions caused by, others, or for our own acts even if we complied with applicable laws at the time such acts
were performed. To date, environmental laws and regulations have not had a significant adverse effect on our capital expenditures,
earnings or competitive position. However, operating petrochemical manufacturing plants and distributing methanol exposes us to
risks in connection with compliance with such laws and we cannot provide assurance that we will not incur significant costs or
liabilities in the future.

Management of Greenhouse Gas Emissions

We believe that minimizing emissions and waste from our business activities is good business practice. Carbon dioxide (“CO”) is
a significant by-product of the methanol production process. The amount of CO, generated by the methanol production process
depends on the production technology (and hence often the plant age), the feedstock and any export of by-product hydrogen. We
continually strive to increase the energy efficiency of our plants, which not only reduces the use of energy but also minimizes CO,
emissions. We have reduced CO, emission intensity in our manufacturing operations by 31% between 1994 and 2011 through asset
turnover, improved plant reliability and energy efficiency and emissions management. Plant efficiency, and thus CO, emissions, is
highly dependent on the design of the methanol plant, so the CO, emission figure may vary from year to year depending on the asset
mix that is operating. We also recognize that CO, is generated from our marine operations, and in that regard we measure the
consumption of fuel by our ocean vessels based on the volume of product transported. Between 2002 and 2011, we reduced our CO,
intensity (tonnes of CO, from fuel burned per tonne of product moved) from marine operations by nearly 22%. We also actively
support global industry efforts to voluntarily reduce both energy consumption and CO, emissions.

We manufacture methanol in Chile, Trinidad, New Zealand, Canada and Egypt. All of these countries signed and ratified the
Kyoto Protocol; however, Canada has since removed itself from that Agreement. We are not currently required to reduce GHGs in the
developing nations of Chile, Trinidad and Egypt, but our production in New Zealand and Canada is subject to GHG reduction
regulations.

New Zealand passed legislation to establish an Emissions Trading Scheme (“ETS”) that came into force in 2010. The ETS
imposes a carbon price on producers of fossil fuels, including natural gas, which is passed on to Methanex, increasing the cost of gas
that Methanex purchases in New Zealand. However, as a trade-exposed company, Methanex is entitled to a free allocation of
emissions units to partially offset those increased costs, and the legislation provides further moderation of any residual cost exposure
until the end of 2012. Consequently, we do not believe that these costs will be significant to the end of 2012. However, after this date,
the moderating features are expected to be removed and our eligibility for free allocation of emissions units will be progressively
reduced. As a consequence, we will likely incur increased costs after 2012. It is impossible to accurately quantify the impact on our
business after 2012 and therefore we cannot provide assurance that the ETS will not have a significant impact on our business after
2012.

Medicine Hat is located in the Canadian province of Alberta, which has an established GHG reduction regulation that applies to
our plant. The regulation requires that facilities reduce emissions intensities by up to 12% of their established emissions intensity
baseline. “Emissions intensity” means the quantity of specified greenhouse gases released per unit of production. In order to meet the
reduction obligation, a facility can choose to make emissions reduction improvements or it can purchase either offset credits or
“technology fund” credits for CDN$15 per tonne of CO, equivalent. Financial obligations are set to begin in 2014 and based on the
expected GHG baseline intensity, we do not believe that, when applied, the cost will be material.

As part of our commitment to the ethic of Responsible Care, we believe it is important to promote renewable energy where it
makes sense for our business. In this regard, we have constructed three wind turbines in southern Chile that were completed in late
2010 and are now supplying electricity to our nearby production facility. The facility has an installed generation capacity of 2.55
megawatts with an expected generation capacity of 1.28 megawatts based on a usage factor of approximately 50%. This project
contributes to the diversification of energy resources in southern Chile.

Refer also to the Risk Factors and Risk Management section of our 2011 MDézA for more information regarding risks related to
environmental regulations.

We have accrued $26 million for site restoration costs related to the decommissioning and reclamation of our methanol

production sites and oil and gas properties. During 2011, cash expenditures applied against the site restoration liability were $0.1
million.

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INSURANCE

The majority of our revenues are derived from the sale of methanol produced at our plants. Our business is subject to the normal
hazards of methanol production operations that could result in damage to our plants. Under certain conditions, prolonged shutdowns of
plants due to unforeseen equipment breakdowns, interruptions in the supply of natural gas or oxygen, power failures, loss of port
facilities or any other event, including any event of force majeure, could adversely affect our revenues and operating income. We
maintain operational and construction insurance, including business interruption insurance and delayed start-up insurance, subject to
certain deductibles, that we consider to be adequate under the circumstances. However, there can be no assurance that we will not
incur losses beyond the limits or outside the coverage of such insurance. From time to time, various types of insurance for companies
in the chemical and petrochemical industries have not been available on commercially acceptable terms or, in some cases, have been
unavailable. There can be no assurance that in the future we will be able to maintain existing coverage, or that premiums will not
increase substantially.

COMPETITION

The methanol industry is highly competitive. Methanol is a global commodity and customers base their purchasing decisions
primarily on the delivered price of methanol and reliability of supply. The relative cost and availability of natural gas or coal feedstock
and the efficiency of production facilities and distribution systems are also important competitive factors. Some of our competitors are
not dependent on a single product for revenues and some have greater financial resources than we do. Our competitors include
state-owned enterprises. These competitors may be better able than we are to withstand price competition and volatile market
conditions. Because of our ability to service our customers globally, the reliability and cost-effectiveness of our distribution system
and the enhanced service we provide customers, we believe we are well positioned to compete in each of the major international
methanol markets.

EMPLOYEES

As of December 31, 2011, we had 1,042 employees (including the employees at the EMethanex and Atlas facilities).

RISK FACTORS

The risks relating to our business are described under the heading Risk Factors and Risk Management in our 2011 MDáA, and
are incorporated in this document by reference. Any of those risks, as well as risks and uncertainties currently not known to us, could
adversely affect our business, financial condition, results of operations or the market price of our securities.

DIVIDENDS

Dividends are payable to the holders of common shares of the Company (“Common Shares”) if, as and when declared by our
Board of Directors and in such amounts as the Board of Directors may, from time to time, determine. The Company”s current dividend
policy is designed so that the Company maintains conservative financial management appropriate to the historically cyclical nature of
the methanol industry to preserve financial flexibility and creditworthiness.

We pay a quarterly dividend on the Common Shares. The first quarterly dividend of $0.05 per share was paid on September 30,

2002 and the dividend amount has been increased every year since then with the exception of 2009 and 2010. The table below shows
the amount and percentage increases to the dividend since its inception in 2002:

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Quarterly
Date Dividend Amount | % Increase
September 30, 2002 $0.050 n/a
September 30, 2003 $0.060 20%
September 30, 2004 $0.080 33%
June 30, 2005 $0.110 37.5%
June 30, 2006 $0.125 14%
June 30, 2007 $0.140 12%
June 30, 2008 $0.155 11%
June 30, 2009 $0.155 0%
June 30, 2010 $0.155 0%
June 30, 2011 $0.170 10%

The following table sets out the total amount of regular dividends per share paid on the Common Shares in each of the last three
most recently completed financial years:

Regular Dividend
Financial Year Ended Paid per Share
December 31, 2009 $0.620
December 31, 2010 $0.620
December 31, 2011 $0.665
CAPITAL STRUCTURE

We are authorized to issue an unlimited number of Common Shares without nominal or par value and 25,000,000 preferred shares
without nominal or par value.

Holders of Common Shares are entitled to receive notice of and attend all annual and special meetings and to one vote in respect
of each Common Share held; receive dividends if, as and when declared by our Board of Directors; and participate in any distribution
of the assets of the Company in the event of liquidation, dissolution or winding up.

Preferred shares may be issued in one or more series and the directors may fix the designation, rights, restrictions, conditions and
limitations attached to the shares of each such series. Currently, there are no preferred shares outstanding.

Our bylaws provide that at any meeting of our shareholders a quorum shall be two persons present in person, or represented by
proxy, holding shares representing not less than 20% of the votes entitled to be cast at the meeting. NASDAQ”s listing standards
require a quorum for shareholder meetings to be not less than 33-1/3% of a company”s outstanding voting shares. As a foreign private
issuer and because our quorum requirements are consistent with practices in Canada, our home country, under NASDAQ rules we are
not subject to NASDAQ”s quorum requirement.

RATINGS

The following information relating to the Company’s credit ratings is provided as it relates to the Company’s financing costs,
liquidity and operations. Specifically, credit ratings affect the Company’s ability to obtain short-term and long-term financing and the
cost of such financing. Additionally, the ability of the Company to engage in certain collateralized business activities on a
cost-effective basis depends on the Company’s credit ratings. A reduction in the current rating on the Company’s debt by its rating
agencies, or a negative change in the Company’s ratings outlook could adversely affect the Company’s cost of financing and its access
to sources of liquidity and capital. In addition, changes in credit ratings may affect the Company’s ability to, and the associated costs
of: (1) entering into ordinary course derivative or hedging transactions that may require the Company to post additional collateral under
certain of its contracts, and (ii) entering into and maintaining ordinary course contracts with customers and suppliers on acceptable
terms.

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The following table sets forth the ratings assigned to the Company?s unsecured debt by Standard $: Poor”s Financial Services
(“S£P”) and Moody”s Investors Service, Inc. (“Moody”s”).

Security sepo Moody’s”
Unsecured Notes BBB- Bal
(stable (positive
outlook) outlook)

(1) S£P”s credit ratings are on a long-term debt rating scale that ranges from AAA to SD, which represents the range from highest to lowest quality of such securities
rated. A rating of BBB by S4P is the fourth highest of 13 categories. According to the SézP rating system, while an obligor rated BBB normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances are more likely to weaken capacity to meet its financial commitments. The
addition of a plus (+) or minus (-) designation after a rating indicates the relative standing within a particular rating category. The ratings outlook addresses trends
or risks with the potential, but not the certainty, of raising or lowering the credit rating sometime over the next two years.

(2) Moody’s credit ratings are on a long-term debt rating scale that ranges from Aaa to C, which represents the range from highest to lowest quality of such securities
rated. A rating of Ba is the fifth highest of nine categories and denotes obligations judged to have speculative elements and subject to substantial credit risk. The
addition of a 1, 2 or 3 modifier after a rating indicates the relative standing within a particular rating category. The modifier 1 indicates that the issue ranks in the
higher end of its generic rating category, the modifier 2 indicates a mid-range ranking and the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category. The ratings outlook is an opinion regarding the likely direction of the issuer”s rating over the medium term.

The rating agencies regularly evaluate the Company, and their ratings of the Company’s long-term and short-term debt are
based on a number of factors, including the Company”s financial strength as well as factors not entirely within the Company”s
control, including conditions affecting the methanol industry generally and the wider state of the economy.

Credit ratings are intended to provide investors with an independent measure of the quality of an issue of securities. The foregoing
ratings should not be construed as a recommendation to buy, sell or hold the securities, as such ratings do not comment as to market
price or suitability for a particular investor. There is no assurance that any rating will remain in effect for any given period of time or
that any rating will not be revised or withdrawn entirely by a rating agency in the future if, in its judgment, circumstances so warrant.
If any such rating is so revised or withdrawn, we are under no obligation to update this Annual Information Form.

MARKET FOR SECURITIES

Our Common Shares are listed on the Toronto Stock Exchange in Canada (trading symbol: MX), on the NASDAQ Global Market
in the United States (trading symbol: MEOH) and on the Foreign Securities Market of the Santiago Stock Exchange of Chile (trading
symbol: Methanex). The following table sets out the market price ranges and trading volumes of our Common Shares on the Toronto
Stock Exchange as well as on the NASDAQ Global Market for each month of our most recently completed financial year (January 1,
2011 through December 31, 2011).

2011 Trading Volumes

The Toronto Stock Exchange NASDAQ Global Market
Trading Symbol: MX Trading Symbol: MEOH
High Low High | Low
(CDNS) | (CDNS$) Volume (US$) | (US$) Volume
January 31.20 | 26.83 | 10,216,524 January 31.44 | 26.73 | 3,533,063

February 29.02 | 27.37 8,269,412 February 29.29 | 27.45 | 2,034,853

March 30.75 | 26.56 6,746,103 March 31.64 | 26.91 | 2,222,611
April 33.12 | 29.80 4,755,425 April 34.90 | 31.11 1,469,577
May 31.13 | 28.90 3,970,642 May 32.32 | 29.50 | 1,696,768
June 31.09 | 27.82 4,007,306 June 31.95 | 28.25 | 1,825,705
July 31.20 | 27.72 2,946,484 July 32.50 | 29.20 | 1,167,470
August 28.36 | 22.26 6,382,348 August 30.21 | 22.44 | 2,523,622

September | 25.47 | 20.64 6,738,416 September | 26.18 | 20.01 1,971,747
October 26.98 | 20.77 5,723,483 October 27.27 | 19.52 | 2,214,003
November | 26.05 | 22.85 7,235,620 November | 25.74 | 22.04 | 2,453,317
December 25.38 | 22.31 4,615,629 December | 25.02 | 21.68 | 1,719,486

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DIRECTORS AND EXECUTIVE OFFICERS

As at December 31, 2011, the directors and executive officers of the Company owned, controlled or directed, directly or indirectly,
501,669 Common Shares representing approximately 0.54% of the outstanding Common Shares as at December 31, 2011.

The following tables set forth the names and places of residence of the current directors and executive officers of the Company,
the offices held by them in the Company, their current principal occupations, their principal occupations during the last five years and,
in the case of the directors, the month and year in which they became directors:

Name and
Municipality of Residence

Office

Principal Occupations and
Positions During the Last Five Years

Director Since?

AITKEN, BRUCE Director and President | President and Chief Executive Officer of the Company since May July 2004
Vancouver, British Columbia and Chief Executive 2004.

Canada Officer

BALLOCH, HowArD Y Director Chairman of Canaccord Genuity Asia Limited” since January 2011; December 2004
Beijing prior thereto President of The Balloch Group since July 2001.

China

CHOQUETTE, PIERRE IO Director Corporate Director. October 1994
Vancouver, British Columbia

Canada

Cook, PHILIP 0 Director Corporate Director. May 2006
Austin, Texas

USA

HAMILTON, THOMAS Director and Chairman | Co-owner of Medora Investments, LLC” since April 2003. May 2007
Houston, Texas of the Board

USA

KOSTELNIK, ROBERT” Director Corporate Director. Since February 2012, principal in Glenrock September 2008
Corpus Christi, Texas Recovery Partners, LLC(. President and Chief Executive Officer of

USA Cinatra Clean Technologies, Inc. from 2008 to May 2011.

MAHAFFY, DOUGLAS y Director Corporate Director. Chairman of McLean Budden Limited”? from May 2006
Toronto, Ontario February 2008 until March 2010; prior thereto Chairman and Chief

Canada Executive Officer of McLean Budden Limited since October 1989.

POOLE, A. TERENCEVY Director Corporate Director. February 1994 except
Calgary, Alberta for June – September
Canada 2003
REID, JOHN Y Director Corporate Director. September 2003
Vancouver, British Columbia

Canada

RENNIE, JANICES Director Corporate Director. May 2006
Edmonton, Alberta

Canada

SLOAN, MoNICA TO) Director Corporate Director. Chief Executive Officer of Intervera Ltd. September 2003

Calgary, Alberta
Canada

from January 2004 to December 2008.

(1) Member of the Audit, Finance and Risk Committee.

(2) Member of the Corporate Governance Committee.

(3) Member of the Human Resources Committee.

(4) Member of the Public Policy Committee.

(5) Member of the Responsible Care Committee.

(6) Canaccord Genuity Asia Limited is an investment banking firm specializing in China and international firms active in the Chinese market.

(7) Pierre Choquette is not standing for re-election at the April 26, 2012 Annual General Meeting.

(8) Medora Investments, LLC is a private investment firm.

(9) Glenrock Recovery Partners, LLC is a company that facilitates the sale of non-fungible hydrocarbons in the United States.

(10) McLean Budden Limited (currently MFS McLean Budden) is an investment management firm that manages over $30 billion in assets for pension, foundation and

private clients in Canada, the United States, Europe and Asia.

(11) Intervera Ltd. provided data quality products and services to the energy industry.

(12) The Directors of the Company are elected each year at the Annual General Meeting of the Company and hold office until the close of the next Annual General
Meeting or until their successors are elected or appointed.

25

Name and Principal Occupations and
Municipality of Residence Office Positions During the Last Five Years
CAMERON, IAN P. Senior Vice President, Corporate | Senior Vice President, Corporate Development and Chief Financial
Vancouver, British Columbia Development and Chief Financial | Officer of the Company since November 2010; prior thereto Senior
Canada Officer Vice President, Finance and Chief Financial Officer of the Company
since January 1, 2003.
FLOREN, JOHN Senior Vice President, Senior Vice President, Global Marketing and Logistics of the
Eastham, Massachusetts Global Marketing and Logistics | Company since June 2005.
USA
GORDON, JOHN K. Senior Vice President, Senior Vice President, Corporate Resources of the Company since
Vancouver, British Columbia Corporate Resources September 1999.
Canada
MACDONALD, MICHAEL G. Senior Vice President, Senior Vice President, Global Operations of the Company since
Vancouver, British Columbia Global Operations November 2010; prior thereto Senior Vice President, Corporate
Canada Development of the Company since January 2004.
MILNER, RANDALL M. Senior Vice President, General Senior Vice President, General Counsel and Corporate Secretary of
Vancouver, British Columbia Counsel and Corporate Secretary |the Company since October 2002.
Canada
SCHIODTZ, PAUL Senior Vice President, Senior Vice President, Latin America of the Company since
Santiago Latin America January 1, 2006.
Chile
WEAKE, HARVEY Senior Vice President, Senior Vice President, Asia Pacific of the Company since
Auckland Asia Pacific December, 2005.
New Zealand

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Since the start of our most recently completed financial year, and for the three most recently completed financial years, no
director or executive officer of the Company, and no person or company that beneficially owns, controls or directs, directly or
indirectly, more than 10% of the Company”s voting securities or any associate or affiliate of such persons, has had any material
interest in any transaction involving the Company.

EXPERTS

KPMG LLP are the auditors of the Company and have confirmed that they are independent with respect to the Company within
the meaning of the Rules of Professional Conduct of the Institute of Chartered Accountants of British Columbia and within the
meaning of the US Securities Act of 1933, as amended, and the applicable rules and regulations thereunder.

LEGAL PROCEEDINGS

The Board of Inland Revenue of Trinidad and Tobago issued an assessment in 2011 against our 63.1% owned joint venture, Atlas
Methanol Company Unlimited (“Atlas”), in respect of the 2005 financial year. All subsequent tax years remain open to assessment.
The assessment relates to the pricing arrangements of certain long-term fixed price sales contracts that extend to 2014 and 2019
related to methanol produced by Atlas. The impact of the amount in dispute for the 2005 financial year is nominal as Atlas was not
subject to corporation income tax in that year. Atlas has partial relief from corporation income tax until 2014.

The Company has lodged an objection to the assessment. Based on the merits of the case and legal interpretation, management
believes its position should be sustained.

AUDIT COMMITTEE INFORMATION

The Audit Committee Charter

The Audit, Finance and Risk Committee (“Committee”) is appointed by the Board to assist the Board in fulfilling its oversight
responsibility relating to: the integrity of the Company”s financial statements; the financial reporting process; the systems of internal
accounting and financial controls; the professional qualifications and independence of the external auditors; the performance of the
external auditors; risk management processes; financing plans; pension plans; and compliance by the Company with ethics policies
and legal and regulatory requirements.

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The Committee?s mandate sets out its responsibilities and duties. A copy of the Committee”s mandate is attached here as
Appendix “A”.

Composition of the Audit Committee

The Committee is comprised of four directors: A. Terence Poole (Chair), Pierre Choquette, John Reid and Janice Rennie. Each
Committee member is independent and financially literate. Mr. Poole is designated as the “audit committee financial expert”. The U.S.
Securities and Exchange Commission has indicated that the designation of Mr. Poole as an audit committee financial expert does not
make Mr. Poole an “expert” for any other purpose, impose any duties, obligations or liability on Mr. Poole that are greater than those
imposed on members of the Committee and Board who do not carry this designation or affect the duties, obligations or liability of any
other member of the Committee.

Relevant Education and Experience

The following is a brief summary of the education and experience of each member of the Committee that is relevant to the
performance of his or her responsibilities as a member of the Committee, including any education or experience that has provided the
member with an understanding of the accounting principles we use to prepare our annual and interim financial statements.

Mr. A. Terence Poole

Mr. Poole is a corporate director. Prior to his retirement in June 2006, he was Executive Vice President, Corporate Strategy and
Development of NOVA Chemicals Corporation (“NOVA”), a commodity chemical company with international operations. Prior to
that position, Mr. Poole was the Executive Vice President, Finance and Strategy of NOVA from 1998 to 2000; Senior Vice President
and Chief Financial Officer of NOVA Corporation from 1994 to 1998; and held other senior financial positions with NOVA
Corporation from 1988. He has worked at other large public companies in various financial and business management capacities since
1971.

Mr. Poole is a Chartered Accountant and holds a Bachelor of Commerce degree from Dalhousie University in Halifax, Nova
Scotia. Mr. Poole is a Member of the Canadian, Quebec and Ontario Institutes of Chartered Accountants and is also a Member of
Financial Executives International.

Mr. Poole serves on the board of Pengrowth Energy Corporation and chairs its Audit Committee.

Mr. Poole has served on the Committee since September 2003, as well as from February 1994 to June 2003. Mr. Poole has
chaired the Committee since May 2006.

Mr. Pierre Choquette

Mr. Choquette is a corporate director. He has over 25 years of senior management experience, concentrated in the petrochemical
industry. Most recently he was Chairman of the Board of the Company from September 2003 until May 2010 and Chairman and Chief
Executive Officer of the Company from September 2003 until May 2004. From October 1994 to September 2003 Mr. Choquette was
President and Chief Executive Officer of the Company. Prior to joining the Company, Mr. Choquette had been President and Chief
Operating Officer of Novacorp International and President of Polysar Inc.

Through Mr. Choquette?s experience as President and Chief Executive Officer and the deep knowledge of the Company he has
gained during his 18-year involvement with the Company, he has an understanding of accounting and financial reporting including
internal controls and procedures for financial reporting.

Mr. Choquette holds a Bachelor of Arts, Bachelor of Science and a Master of Science in Chemical Engineering from Laval
University, Quebec City. He is also a graduate of the Advanced Management Program at the Harvard Graduate School of Business
Administration.

Mr. Choquette also serves as a director on the Canada Pension Plan Investment Board.

Mr. Choquette has served on the Committee since May 2010 and attended all Committee meetings from 1994 to 2004 in his
capacity as CEO and the vast majority of Committee meetings in his capacity as Chairman of the Board from 2004 to 2010.

Mr. Choquette is not standing for re-election as a director at the April 26, 2012 Annual General Meeting.

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Mr. John Reid

Mr. Reid is a corporate director. He held the position of President and Chief Executive Officer of Terasen Inc., an energy
distribution and transportation company, from November 1997 to November 2005 and prior to that was Executive Vice President and
Chief Financial Officer of Terasen. Prior to joining Terasen, Mr. Reid was the President and Chief Executive Officer of Scott Paper.
He also held various other senior positions at Scott Paper, including Corporate Vice President, Finance and Controller.

Mr. Reid is a Chartered Accountant and holds an economics degree from Newcastle University and is a Fellow of the British
Columbia, England and Wales Institutes of Chartered Accountants.

Mr. Reid also serves on the board of Finning International Inc. as the Lead Director, is a member of its Audit Committee and in
the past was designated as its “financial expert.” Mr. Reid also sits on the board of the private companies Corix Infrastructure Inc. and
Corix Water Products Inc.

Mr. Reid has served on the Committee since September 2003.
Ms. Janice Rennie

Ms. Rennie is a corporate director. From 2004 to 2005, Ms. Rennie was Senior Vice President, Human Resources and
Organizational Effectiveness for EPCOR Utilities Inc. At that time, EPCOR built, owned and operated power plants, electrical
transmission and distribution networks, water and wastewater treatment facilities and infrastructure in Canada and the United States.
Prior to 2004, Ms. Rennie held senior management positions in a number of private firms, including Principal of Rennie $: Associates,
which provided investment and related advice to small and mid-sized companies.

Ms. Rennie holds a Bachelor of Commerce degree from the University of Alberta and is a Fellow of the Institute of Chartered
Accountants of Alberta and the Institute of Corporate Directors.

Ms. Rennie serves on the boards of Teck Resources Limited, West Fraser Timber Co. Ltd., Capital Power Corporation, Major
Drilling Group International Inc. and WestJet Airlines Ltd. and is a member of all their Audit Committees. In addition, Ms. Rennie
serves on the board and chairs the Audit Committee of Greystone Capital Management Inc., a private company.

Ms. Rennie has served on the Committee since May 2006.
Pre-Approval Policies and Procedures

The Company”s Audit, Finance and Risk Committee (the “Audit Committee”) annually reviews and approves the terms and scope
of the external auditors” engagement. The Audit Committee oversees the Audit and Non-Audit Pre-Approval Policy, which sets forth
the procedures and the conditions by which permissible services proposed to be performed by KPMG LLP are pre-approved. The
Audit Committee has delegated to the Chair of the Audit Committee pre-approval authority for any services not previously approved
by the Audit Committee. All such services approved by the Chair of the Audit Committee are subsequently reviewed by the Audit

Committee.

All non-audit service engagements, regardless of the cost estimate, must be coordinated and approved by the Chief Financial
Officer to further ensure that adherence to this policy is monitored.

Audit and Non-Audit Fees Billed by the Independent Auditors

KPMGS*s global fees relating to the years ended December 31, 2011 and December 31, 2010 are as follows:

US$000s 2011 2010
Audit Fees 1,827 1,600
Audit-Related Fees 116 138
Tax Fees 99 304
Total 2,042 2,042

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Each fee category is described below.
Audit Fees

Audit fees for professional services rendered by the external auditors for the audit of the Company”s consolidated financial
statements; statutory audits of the financial statements of the Company”s subsidiaries; quarterly reviews of the Company”s financial
statements; consultations as to the accounting or disclosure treatment of transactions reflected in the financial statements; and services
associated with registration statements, prospectuses, periodic reports and other documents filed with securities regulators.

Audit fees for professional services rendered by the external auditors for the audit of the Company”s consolidated financial
statements were in respect of an “integrated audit” performed by KPMG globally. The integrated audit encompasses an opinion on the
fairness of presentation of the Companys financial statements as well as an opinion on the effectiveness of the Company”s internal
controls over financial reporting. The increase in audit fees for 2011 compared with 2010 is due to an expanded scope resulting from
the start-up of the Egypt and Medicine Hat facilities, the appointment of KPMG as our statutory auditors in New Zealand and services
provided in relation to the shelf prospectus.

Audit-Related Fees

Audit-related fees for professional services rendered by the auditors for financial audits of employee benefit plans; procedures and
audit or attest services not required by statute or regulation; and consultations related to the Company”s transition to international
financial reporting standards (“IFRS”) and the accounting or disclosure treatment of other transactions.

Tax Fees

Tax fees for professional services rendered for tax compliance and tax advice. These services consisted of: tax compliance,
including the review of tax returns; assistance in completing routine tax schedules and calculations; and advisory services relating to

domestic and international taxation.

TRANSFER AGENT AND REGISTRAR

Our principal transfer agent is CIBC Mellon Trust Company at its offices in Vancouver, British Columbia. Our co-transfer agent
in the United States for our Common Shares is Registrar and Transfer Company at its offices in New Jersey.

CONTROLS AND PROCEDURES

Our disclosure controls and procedures are described under the heading Controls and Procedures in our 2011 MDWA and are
incorporated in this AIF by reference.

CODE OF ETHICS

We have a written code of ethics that applies to our directors, officers and employees, including our principal executive officer,
principal financial officer and principal accounting officer. A copy of our code, entitled “Code of Business Conduct”, can be found on
our website at www.methanex.com or upon request from the Corporate Secretary at the address below under the heading Additional
Information.

29

ADDITIONAL INFORMATION

Additional information relating to the Company, including directors” and officers? remuneration and indebtedness, principal
holders of the Company”s securities and securities authorized for issuance under equity compensation plans, is contained in our
Information Circular dated March 2, 2012 relating to our Annual General Meeting that will be held on April 26, 2012.

Additional financial information about the Company is provided in the Company”s financial statements for the year ended
December 31, 2011 and in our 2011 MD¿xxA.

Copies of the documents referred to above are available on the Canadian Securities Administrators* SEDAR website at
www.sedar.com and may also be obtained upon request from:

Methanex Corporation

Randy Milner

Senior Vice President, General Counsel and Corporate Secretary
1800 Waterfront Centre

200 Burrard Street

Vancouver, British Columbia V6C 3M1

Telephone: 604 661 2600

Facsimile: 604 661 2602

E-mail: rmilner(Ymethanex.com

Additional information relating to the Company may be found on the Canadian Securities Administrators? SEDAR website at
www.sedar.com and on the United States Securities and Exchange Commission’s EDGAR website at www.sec.gov.

30

APPENDIX “A”

METHANEX CORPORATION
AUDIT, FINANCE AND RISK COMMITTEE MANDATE

Creation

A committee of the directors to be known as the “Audit, Finance and Risk Committee” (hercinafter referred to as the
“Committec”) is hereby established.

Purpose and Responsibility

The Committee is appointed by the Board to assist the Board in fulfilling its oversight responsibility relating to: the integrity of
the Corporation”s financial statements; the financial reporting process; the systems of internal accounting and financial controls;
the professional qualifications and independence of the external auditors; the performance of the external auditors; risk
management processes; financing plans; pension plans; and compliance by the Corporation with ethics policies and legal and
regulatory requirements.

The Committee”s role is one of oversight. It is the responsibility of the Corporation’s management to plan audits and to prepare
consolidated financial statements in accordance with generally accepted accounting principles (“GAAP”), and it is the
responsibility of the Corporation”s external auditor to audit these financial statements. Therefore, each member of the Committee,
in exercising his or her business judgment, shall be entitled to rely on the integrity of those persons and organizations within and
outside the Corporation from whom he or she receives information, and on the accuracy of the financial and other information
provided to the Committee by such persons or organizations. The Committee does not provide any expert or other special
assurances as to the Corporation’s financial statements or any expert or professional certification as to the work of the
Corporation’s external auditor. In addition, all members of the Committee are equally responsible for discharging the
responsibilities of the Committee and the designation of one member as an “audit committee financial expert” pursuant to the
Applicable Rules (as defined below) is not a statement of intention by the Corporation to impose upon such designee duties,
obligations or liability greater than those imposed on such a director in the absence of such designation.

Committee Membership

Composition of the a) The Committee must be composed of a minimum of
Committee three directors.

Appointment and Term of Members b) The members of the Committee must be appointed or
reappointed at the organizational meeting of the Board
concurrent with each Annual General Meeting of the
shareholders of the Corporation. Each member of the
Committee continues to be a Committee member until a
successor is appointed, unless he or she resigns or is
removed by the Board or ceases to be a director of the
Corporation. Where a vacancy occurs at any time in the
membership of the Committee, it may be filled by the
Board and shall be filled by the Board if the
membership of the Committee is less than three
directors as a result of the vacancy.

Financial Literacy and Independence c) Each member of the Committee shall meet the
independence and experience requirements, and at least
one member of the Committee shall qualify as an “audit
committee financial expert.” These requirements shall
be in accordance with the applicable rules and
regulations (the “Applicable Rules”) of the Canadian
Securities Administrators, the U.S. Securities and
Exchange Commission, the Toronto Stock Exchange
and the NASDAQ Stock Market.

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Appointment of Chair and Secretary

Use of Outside Experts

4. Meetings

Time, Place and Procedure of
Meetings

Quorum

Quarterly Meetings

Notice of Meetings

Waiver of Notice

Attendance of External Auditors

Meeting with Financial Management

Meeting without Management

d)

The Board or, if it does not do so, the members of the
Committee, must appoint one of their members as
Chair. If the Chair of the Committee is not present at
any meeting of the Committee, the Chair of the meeting
must be chosen by the Committee from the Committee
members present. The Chair presiding at any meeting
of the Committee has a deciding vote in case of
deadlock. The Committee must also appoint a Secretary
who need not be a director.

Where Committee members believe that, to properly
discharge their fiduciary obligations to the Corporation,
it is necessary to obtain the advice of independent legal,
accounting or other experts, the Chair shall, at the
request of the Committee, engage the necessary experts
at the Corporation’s expense. The Board must be kept
apprised of both the selection of the experts and the
experts” findings through the Committee”s regular
reports to the Board.

The time and place of Committee meetings, and the
procedures for the conduct of such meetings, shall be
determined from time to time by Committee members,
provided that:

i) a quorum for meetings must be two members,
present in person or by telephone or other
telecommunication device that permits all persons
participating in the meeting to communicate with
each other;

ii) the Committee must meet at least quarterly;

iii) notice of the time and place of every meeting must
be given in writing or by electronic transmission to
each member of the Committee and the external
auditors of the Corporation at least 24 hours prior
to the Committee meeting;

iv) a member may waive notice of a meeting, and
attendance at the meeting is a waiver of notice of
the meeting, except where a member attends a
meeting for the express purpose of objecting to the
transaction of any business on the grounds that the
meeting is not lawfully called;

v) the external auditors are entitled to attend each
meeting at the Corporation”s expense;

vi) the Committee will, at least annually, meet with
senior financial management, including the Chief
Financial Officer and the Corporate Controller,
without other members of management present;

vii) each regular meeting of the Committee will

conclude with a session without any management
personnel present;

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5.

1)

Calling a Meeting

Committee Determines Attendees

Reports to the Board

Duties and Responsibilities of the Committee

Financial Statements and Disclosure

Annual Report and Disclosures

Prospectuses

Quarterly Interim Reports
and Disclosures

Accounting Policies and Estimates

b)

b)

d)

viii)a meeting of the Committee may be called by the
Secretary of the Committee on the direction of the
Chair or Chief Executive Officer of the
Corporation, by any member of the Committee or
the external auditors; and

(ix) notwithstanding the provisions of this paragraph,
the Committee has the right to request any officer
or employee of the Corporation or the
Corporation’s outside counsel or external auditor to
be present or not present at any part of the
Committee meeting.

The Committee shall make regular reports to the Board.

Review and discuss with management and the external
auditor, and recommend for approval by the Board, the
Corporation’s annual report, Annual Information Form,
audited Annual Consolidated Financial Statements,
annual Management’s Discussion and Analysis,
Management Information Circular, any reports on
adequacy of internal controls, and all financial
statements in prospectuses or other disclosure
documents.

Review and recommend for approval by the Board all
prospectuses and documents that may be incorporated
by reference into a prospectus, including without
limitation, material change reports and proxy circulars.

Review, discuss with management and the external
auditor, and approve the Corporation’s interim reports,
including the quarterly financial statements, interim
Management’s Discussion and Analysis and press
releases on quarterly and year-end financial results,
prior to public release.

Review and approve all accounting policies and
estimates that would have a significant effect on the
Corporation’s financial statements, and any changes to
such policies. This review will include a discussion
with management and the external auditor concerning:

1) any areas of management judgment and estimates
that may have a critical effect on the financial

statements;

li) the effect of using alternative accounting
treatments that are acceptable under GAAP;

lii) the appropriateness, acceptability and quality of the
Corporation’s accounting policies; and

33

Non-GAAP Financial Information

Regulatory and Accounting Initiatives

Litigation

Financing Plans

2) Risk Management and Internal Control

Risk Management Policies

Risk Management Processes

2)

h)

b)

iv) any material written communication between the
external auditor and management, such as the
annual management letter and the schedule of
unadjusted differences.

Discuss with management the use of “pro forma”” or
“non-GAAP information”> in the Corporation’s
continuous disclosure documents.

Discuss with management and the external auditor the
effect of regulatory and accounting initiatives as well as
the use of offbalance sheet structures on the
Corporation”s financial statements.

Discuss with the Corporation’s General Counsel, and
with external legal counsel if necessary, any litigation,
claim or other contingency (including tax assessments)
that could have a material effect on the financial
position or operating results of the Corporation, and the
manner in which these matters have been disclosed in
the financial statements.

Review the financing plans and objectives of the
Corporation, as received from and discussed with
management.

Review and recommend for approval by the Board
changes considered advisable, after consultation with
management, to the Corporation’s policies relating to:

1) the risks inherent in the Corporation’s businesses,
facilities and strategic direction;

li) financial risks, including foreign exchange, interest
rate and investment of cash;

lii) overall risk management strategies and the
financing of risks, including insurance coverage in
the context of competitive and operational
considerations;

iv) the risk retention philosophy and the resulting
uninsured exposure of the Corporation; and

v) shipping risk.
Review with management at least annually the
Corporation’s processes to identify, monitor, evaluate

and address important enterprise-wide strategic and
business risks.

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3)

Adequacy of Internal Controls

Financial Risk Management

External Auditors

Appointment and Remuneration

Resolving Disagreements

Direct Reporting to Committee

Quality Control and Independence

d)

a)

b)

d)

Review, at least quarterly, the results of management’s
evaluation of the adequacy and effectiveness of internal
controls within the Corporation in connection with the
certifications signed by the CEO and CFO.
Management’s evaluation will include a review of:

i) policies and procedures to ensure completeness and
accuracy of information disclosed in the quarterly
and annual reports, prevent earnings management
and detect material financial statement
misstatements due to fraud and error; and

li) internal control recommendations of the external
auditors and arising from the results of the internal
audit procedures, including any special steps taken
to address material control deficiencies and any
fraud, whether or not material, that involves
management or other employees who have a
significant role in the Corporation’s internal
controls.

Review with management activity related to managing
financial risks to the Corporation, including hedging
programs.

Review and recommend to the Board:

1) the selection, evaluation, reappointment or, where
appropriate, replacement of external auditors; and

li) the nomination and remuneration of external
auditors to be appointed at each Annual General
Meeting of Shareholders.

Resolve any disagreements between management and
the external auditor regarding financial reporting.

The external auditors shall report directly to the
Committee and the Committee has the authority to
communicate directly with the external auditors.

Review a formal written statement requested at least
annually from the external auditor describing:

1) the firm’s internal quality control procedures;

li) any material issues raised by the most recent
internal quality control review, peer review of the
firm or any investigation by governmental or
professional authorities within the preceding five
years respecting one or more independent audits of
the Corporation carried out by the firm;

lii) any steps taken to deal with any such issues; and

iv) all relationships between the external auditors and
the Corporation.

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4)

External Audit Plan

Rotation of Senior Audit Partner

Remuneration of External Auditors

Restrictions on Hiring Employees of
External Auditor

Report from the External Auditors

Meeting with Auditors and
Management

Internal Audit

Internal Audit Plans

Audit Findings and Recommendations

e)

2)

h)

3)

b)

The Committee will actively engage in a dialogue with
the external auditor with respect to whether the firm”s
quality controls are adequate, and whether any of the
disclosed relationships or non-audit services may
impact the objectivity and independence of the external
auditor based on the independence requirements of the
Applicable Rules. The Committee shall present its
conclusion with respect to the independence of the
external auditor to the Board.

Review and approve the external audit plan and enquire
as to the extent the planned audit scope can be relied upon
to detect weaknesses in internal control or fraud or other
illegal acts. Any significant recommendations made by
the auditors for strengthening internal controls will be
reviewed.

Ensure the rotation of senior audit personnel who have
primary responsibility for the audit work, as required by
law.

Review and approve (in advance) the scope and related
fees for all auditing services and non-audit services
permitted by regulation that are to be provided by the
external auditor in accordance with the Corporation’s
Audit and Non-Audit Services Pre-Approval Policy,
which is to be annually reviewed and approved by the
Committee.

Ensure the establishment of policies relating to the
Corporation’s hiring of employees of or former
employees of the external auditor, if such individuals
have participated in the audit of the Corporation, as
required by law.

Prior to filing the Quarterly Consolidated Financial
Statements and the Annual Consolidated Financial
Statements, the Committee should receive a report from
the external auditors on the results of their review or
audit.

The Committee should meet with the external auditors
without management present and discuss any issues
related to performance of the audit work, any
restrictions and any significant disagreement with
management. The Committee should also meet
separately with management to discuss the same
matters as those discussed with the external auditors.

Review and approve the annual Internal Audit Plan and
objectives.

Review the significant control issues identified in
internal audit reports issued to management and the
responses and actions taken by management to address
weaknesses in controls.

36

Meeting with Auditors c) The Committee will meet, without management present,
with representatives of the accounting firm and/or the
Corporation’s Internal Auditor that executed the annual
Internal Audit Plan.

5) Pension Plans

With respect to all investing and funding aspects of all defined benefit corporate sponsored pension plans of the Corporation and its
wholly owned subsidiaries that have estimated actuarial liabilities in excess of US$10 million (collectively the “Retirement Plans”):

Constitute Pension Committees a) Annually constitute Committees (the “Pension
Committees”) with responsibility for the investment
activities of the Retirement Plans” trust funds.

Statements of Pension Investment b) Review the Corporation’s Statement of Pension
Policy and Procedures Investment Policy for the Retirement Plans” trust funds
whenever a major change is apparent or necessary.

Amendments to Retirement Plans and c) Review and recommend to the Board any amendments to

Material Agreements the Retirement Plans” trust agreements and any material
document written or entered into pursuant to the
Retirement Plans” trust agreements.

Appointment of Auditors, Actuaries d) Approve the recommendations of the officers of the

and Investment Managers Corporation regarding the reappointment or
appointment of auditors and recommendations of the
Pension Committees regarding appointment of
investment managers and actuaries of the Retirement
Plans.

Retirement Plan Financial Statements e) Review and approve the annual financial statements of
the Retirement Plans, and related trust funds, and the
auditors” reports thereon.

Retirement Plan Report f) Review and recommend for approval by the Board, the
annual report on the operation and administration of the
Retirement Plans and related trust funds.

Terms of Reference of the Pension g) Review and recommend to the Board for approval the

Committees Terms of Reference of the Pension Committees (to be
approved jointly with the Human Resources Committee
of the Board) and any material amendments thereto.

Delegation to the Pension Committees h) Approve the delegation of certain responsibilities to
members of the Pension Committees.

Actuarial Reports and Funding i) Review the actuarial reports on the Retirement Plan as
Assumptions required by applicable regulations and any special
actuarial reports.

With respect to all investing and funding aspects of all defined contribution pension plans and defined benefit pension plans that have
estimated actuarial liabilities of less than US$10 million of the wholly owned subsidiaries of the Corporation (“other Retirement
Plans”):

Other Retirement Plans Report J) Receive from management and review with the Board, at
least annually, a report on the operation and
administration of other Retirement Plans” trust funds,
including investment performance.

37

6)

Delegation of Authority

General Duties

Code of Business Conduct
Compliance

Code of Ethics

Compliance Reporting Process

Regulatory Matters

Disclosure Policy

Related-Party Transactions

Mandate Review

Annual Evaluation

k)

b)

d)

2)

h)

Administer and delegate to management-committees as
considered advisable all other matters related to other
Retirement Plans” trust funds to which the Committee has
been delegated authority.

Obtain a report at least annually from the Senior Vice
President, General Counsel £ Corporate Secretary on
the Corporation’s and its subsidiary/forcign-affiliated
entities” conformity with applicable legal and ethical
compliance programs (e.g., the Corporation”s Code of
Business Conduct).

Review and recommend to the Board for approval a
code of ethics for senior financial officers.

Ensure that a process and procedure has been
established by the Corporation for receipt, retention,
and treatment of complaints regarding non-compliance
with the Corporation’s Code of Business Conduct,
violations of laws or regulations, or concerns regarding
accounting, internal accounting controls or auditing
matters. The Committee must ensure that procedures
for receipt of complaints allow for confidential and
anonymous submission of complaints from employees.

Discuss with management and the external auditor any
correspondence with regulators or governmental
agencies and any published reports that raise material
issues regarding the Corporation’s compliance policies.

Review annually and recommend to the Board for
approval, the Corporation’s Disclosure policies. In
particular, the Committee will review annually the
Corporation’s procedures for public disclosure of
financial information extracted or derived from the
Corporation”s financial statements.

Review and approve all related-party transactions.

Review and recommend to the Board for approval
changes considered advisable based on the Committee”s
assessment of the adequacy of this Mandate. Such
review will occur on an annual basis and the
recommendations, if any, will be made to the Board for
approval.

The Committee will conduct an annual evaluation to

ensure that it has satisfied its responsibilities in the
prior year in compliance with this Mandate.

38

A Responsible Care? Company

RR DONNELLEY

Link al archivo en CMFChile: https://www.cmfchile.cl/sitio/aplic/serdoc/ver_sgd.php?s567=1d3117d0002f3767dc52ac455c3c8c85VFdwQmVFMXFRWHBOUkVGNlRtcEZkMDVCUFQwPQ==&secuencia=-1&t=1682366909